Box rides high on Wall Street’s warm welcome

The company's shares on Friday traded as much as 77 percent above the set IPO price.

Box CEO Aaron Levie and others at the open of the New York Stock Exchange as the company's shares begin trading

Box CEO Aaron Levie and others at the open of the New York Stock Exchange as the company's shares begin trading

Box made a splashy entrance on the New York Stock Exchange Friday, opening at $20.20 per share, or 44 percent higher than the price it had set for itself the night before.

With 12.5 million shares for sale, the initial public offering raised some $175 million that Box can now use to invest in its business, and a market capitalization of $1.6 billion.

By Friday afternoon, the stock -- trading under the symbol "BOX" -- had reached as high as $24.73 per share, or 77 percent above its IPO price.

"It was unbelievable," said Steve Sarracino, a founder and partner at Activant Capital, noting that current prices were giving Box a valuation on a par with the $2 billion it saw in its last private funding round in July.

"We were watching closely because for the first time it looked like the public market was going to impose discipline on the private market, but they blew right through there. I don't know if it's good or bad, but it tells us the market is risk-on," he said.

Wall Street's warm reception can only come as welcome reassurance for Box, whose IPO journey has been a rocky one. After originally filing to go public last March, the company ended up postponing those plans, citing unfavorable market conditions.

Im skeptical, Sarracino said. With high marketing costs in particular, the company was burning through its cash faster than many investors like to see, he said, prompting some to push back. That, in turn, may have prompted the companys IPO delay, he said.

Now, however, not only does it look like Box has turned the corner in that respect, but the timing may have been better in other ways. Perhaps most notably, "there haven't been a slew of tech IPOs recently," Sarracino noted.

"People have had time to do the research," he said. "I also think there aren't a lot of places to go from a macro perspective in 2015. This could be a really strong year for equities."

Box's technology, meanwhile, is clearly a factor in its Wall Street success. "When it started, what it did was revolutionary in the enterprise market," Sarracino said.

Looking ahead, though, there's no doubt Box will have to move quickly. Storage is a commodity business, Sarracino noted, and Box will have to make sure customers see it as a provider of more than just storage.

"It will be important to continue to provide vertical apps on top of infrastructure," he said. "They already have some stuff, like basic apps for small businesses and a software development kit that developers can build on, but they need to do more."

It will need to create apps for functions such as collaboration and messaging, for instance, and they'll need to be tailored for specific industries. "They'll probably start horizontal, but they'll need to go vertical," Sarracino said.

"It's hard to get developers' attention right now, so they'll probably have to build a bunch of it on their own," he said. On the upside, "they're really well-positioned to do it, and investors are going to be watching very closely."

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business managementcloud computinginternetbusiness issuesfinancial resultsBoxInvestor relations

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Katherine Noyes

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?