Dropbox (DBX) the online file storage giant, recently released its second quarter results. The company reported a 20% rise in paying subscribers, who on average spent 5% more than the previous year.
Despite the positive Q2 report, the company’s stocks fell by 10% on Friday. Many speculate that the dip may be due to the company’s IPO (initial public offering) in March 2018, which it completed after 11 years as a private company. The IPO, worth $750 million, was the biggest seen in tech since Snap’s in 2017.
As with many IPOs, some of Dropbox’s shareholders may be in a ‘lock-up’ situation, where they hold their shares until a set date following the IPO, restricting the supply of shares to increase their value. When the lock-up expires these shareholders can choose to sell, often lowering the price of the shares.
The announcement that the company’s COO, Dennis Woodside, will be leaving on September 4th, 2018, could be another reason for decline in share price. At the time of departure he will have been at Dropbox for three years, helping it grow into an international, publicly-traded company, with over $1bn in revenue.
Considering the wider U.S. economy, shares display growth across the board, apart from a few outliers. As more companies release their Q2 results, traders will choose if now is the right time to ‘trade American’.