As Dropbox hanged in its stock market debut on Friday, shares of cloud software compete with Box went the other way, plunging 7 percent. At market close, Box stock was down beside 8.2 percent.
The two companies have been competing for over a decade in the call of cloud file storage, with both benefiting from the speedy move to mobile devices and the need to access data from anywhere at all hours of the day.
Box CEO Aaron Levie has avowed that his company is more focused on working with big businesses than is Dropbox, but investors indubitably recognize the threat. Dropbox gained wide adoption in the consumer peddle with a product that has free and paid tiers and started getting purchase in businesses as users brought the app to work.
Box is one of seven competitors that Dropbox beadrolls in its IPO prospectus, along with much bigger companies like Amazon, Google, Apple and Microsoft. Dropbox says it conflicts with Box “on a more limited basis” for enterprise customers.
Dropbox shares snatched as much as 50 percent from their IPO price of $21 to as strong as $31.60, giving the company a stock market value of over $12 billion. At the end of the traffic day, Box was valued at $2.8 billion.
Until Friday, Dropbox had faced disapproval for not living up to its $10 billion valuation from 2014, and investors had unmistakable down their private Dropbox shares in recent years.
Dropbox conjectured in its prospectus that is has 500 million registered users, but only 11 million grease someones palm subscribers. About 30 percent of those are on a business plan.
“That’s hither kind of $330 million or so in revenue as compared to our $500 million, which is fully enterprise-driven,” Levie said about Dropbox at the Morgan Stanley Technology, Device and Telecom conference in San Francisco earlier this month.
Dropbox CEO Drew Houston has also on occasion spoken about how the company is distinct from Box.
“We’ve got a competitor out there, they’re disposed to, oh, we’re Dropbox for the enterprise,” he said, referring to Box, at a 2015 company event, as Wired reported. “But the dispute is they don’t have that kind of bottom-up adoption.”
Box shares knock sharply early this month after the company issued a weaker takings forecast than analysts expected for its fiscal quarter.