Finding the next technology gem which has yet to experience a meteoric rise can be very difficult to do in this current bull market. Technology stocks across the board have sold off in recent weeks, making some appear to be relatively good deals when compared to valuations seen a month or two ago.
Despite slumping stock prices for most NASDAQ-traded equities, Friday's initial public offering (IPO) of Dropbox Inc. (NASDAQ:DBX) saw the cloud storage company's valuation increase more than 50% intra-day, closing more than 35% above the offering price of $21 per share. This highly anticipated IPO was oversubscribed, with investors clamoring to grab a piece of a company which has performed very well in recent years and has the potential to continue to grow its top and bottom line at a rate equal to, or better, than many of its peers.
Dropbox's business model and market position has placed this firm in the upper-echelon of technology companies with proven business models and a record of rising cash flow which translates into a easy to visualize path to long-term growth. Few companies in this space have the clout of Dropbox, and with cloud storage needs expected to continue to grow over time at a much higher rate than other key industries, I expect to see further near and medium term strength with this company moving forward.
Keeping an eye on the upcoming Spotify IPO, this valuation bump could prove to be very beneficial for early shareholders in the private company.
Invest wisely, my friends.
Tech Insider
