Dropbox’s (NASDAQ: DBX) incredible 32% pop last week on no news lifted the company’s market cap to $16.5 billion and widened its gap from Box’s (NYSE: BOX) $3.87-billion market cap. This is deserved valuation because Dropbox’s file-storing services are everywhere. I use it. People use it, for free. And those same people tell co-workers to use it and to buy a subscription. Dropbox’s 77% EPS growth this year and 40% increase next year is sustainable.
Etsy’s (NASDAQ: ETSY) 28% rally on a huge spike in volume. Value investors may shun the stock over its 81x P/E and 7.38x PEG but those multiples may come down. Etsy raised fees by a significant amount, from a 3.5% cut to a lofty 5%. Like with PayPal’s (NASDAQ: PYPL) model of gouging its customers, Etsy may do the same because of the uniqueness of the brand and moat it has over its customer base. Etsy proved that Amazon.com (NASDAQ: AMZN) is hardly a threat. Unless Etsy customers move to another platform, the revenue will rise sharply.
iQIYI’s (NASDAQ: IQ) 22% rise overshadows JD.COM’s (NASDAQ: JD) rebound. The freshly IPO’d stock rose when the post-spun-off Baidu (NASDAQ: BIDU) unit said it would add a Ctrip (NASDAQ: CTRP) executive to the board. It started an AI competition for video-based multimodal biometric recognition. This is catchy technology but has yet to pay off for iQIYI. Time will tell if the latest moves translate to sales growth.
