You might be able to buy Dropbox stock for the first time in 2017 as an IPO looks promising. The widely used file storage company last sought funding in 2014 and was reported to be valued at around $10 billion at that time. However since then its value is believed have gone down due to the economy and other factors.
As recently as the summer of 2016, news came out that Dropbox CEO Drew Houston was talking to advisors about the possibility of the company going public. This was a reversal from all of his earlier statements that Dropbox was not going public “anytime soon”.
While 2016 was a year that saw few high profile IPO’s, it seems that 2017 might be very different. Dropbox, along with other companies such as Snap, Uber, Spotify, Pinterest and a few others might take the plunge and start offering stock to the public through the IPO process.
To Buy Dropbox Stock You Will Need A Broker Account
If you are a regular individual investor like I am, you won’t have access to any IPO’s before they go public. Getting in early is something that is usually reserved for institutions and high net worth investors with connections. That means if you want to buy Dropbox shares you will have to wait until the first day the company goes public.
To buy any stock listed on an American market (including Dropbox once has its IPO) you need to have an online broker account. There are 10 to 15 reputable brokers to choose from that charge between $4.95 and $9.99 per trade and I use TD Ameritrade as my broker for the portfolio seen on the front page of this website. I consider TD Ameritrade to be one of the best choices because of its low trading fee of $6.95 combined with the fact that it came in an impressive 3rd place in Barron’s 2017 review of brokers. There are also no minimum dollar requirements for opening a new account so it is a great choice for investors of all levels.
Opening up an account with any online broker should take you no more than 30 minutes and once you successfully transfer money into your account you can start buying stocks. If you do open a broker account with TD Ameritrade, please make sure to fund your account right away so you are ready when Dropbox has its IPO. I recommend making a list of other stocks you want to buy as well and start investing for your future.
How Big Will The Dropbox IPO Be?
Dropbox is thought to have about 500 million users and 200 million actual paying customers. It was reported that the company became cash flow positive sometime in 2016 which has allowed it to remain private longer. Companies often like to stay private for as long as possible because once they IPO, they are beholden to extreme scrutiny from their shareholders and the media.
Cloud storage and file sharing companies Dropbox and Box are now being challenged by bigger players such as Google, Microsoft, Amazon, and Apple, Even Alibaba wants to start offering cloud storage in the U.S and so the landscape is changing rapidly. The closest comparison to Dropbox is Box which went public in 2015 and the stock has been underwater (often significantly so) ever since it closed above $23 that first IPO day. The real question is: if you buy Dropbox stock at the IPO, will it fare significantly better than Box stock has from its inception? Will it actually be a stock that goes up and makes you money?