

Online Storage Company Box Has Strong Debut in First Day of Trading - sethbannon
http://dealbook.nytimes.com/2015/01/23/online-storage-company-box-has-strong-debut-in-first-day-of-trading/?_r=1

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kiyoto
First of all, congratulations to Aaron Levie and Box. This is a tremendous
journey of perspicacity and grit. Here is a write-up about Aaron Levie's
journey by his friend Om Malik: [https://gigaom.com/2014/03/24/levietation-a-
believers-rise-t...](https://gigaom.com/2014/03/24/levietation-a-believers-
rise-to-the-top/)

Also, one thing people absolutely do not understand about Box (or they
underestimate this aspect of Box's business): they are an 1) enterprise 2)
SaaS company that 3) targets slow-moving, low-churn departments. Look, for
example, this analysis by SaaStr: [http://www.saastr.com/2014/12/18/saastr-on-
techcrunch-box-wi...](http://www.saastr.com/2014/12/18/saastr-on-techcrunch-
box-will-hit-1-billion-in-revenues-before-you-know-it/)

~~~
jhonovich
That 'analyis', i.e., “Box Will Hit $1 Billion In Revenues Before You Know
It”, is the type of wild claim that people will look back years from now as a
great example of the irrational exuberance of this age.

~~~
droopyEyelids
I don't know man. They're in the same industry as other large enterprise
vendors. If their product works, and it costs more than $15 a user, and they
have many 10k user companies, they could see that sort of revenue with 7k
customers. I think thats totally doable. There are 600k enterprises with over
10k users.

[http://www.census.gov/econ/smallbus.html](http://www.census.gov/econ/smallbus.html)

------
hellskitchendev
If anyone is interested in how much the VC's or the CEO made on their
investments in Box check out EquityZen's Infographic here:
[https://equityzen.com/path-to-
ipo/box/?utm_source=hackernews...](https://equityzen.com/path-to-
ipo/box/?utm_source=hackernews&utm_medium=comment&utm_campaign=box)

~~~
mtmail
Love the data. Don't like the
&utm_source=hackernews&utm_medium=comment&utm_campaign=box part of the URL. Is
commenting really a campaign and worth tracking?

~~~
hellskitchendev
I like tracking everything. Just curious, why does it bother you?

~~~
wodenokoto
can't this be tracked by referer links?

~~~
garysieling
The referrers get stripped when you come from an https site like HN, so you
actually can't

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spinlock
I'm always confused when stories like these are spun as a "strong debut"
rather than saying Box left a lot of value on the table. Why do we care more
about the people who've held the stock for < 1 day than the capitalization of
the company?

~~~
yesiamyourdad
It's understood that a tech company releases a small minority of shares at IPO
and follows up with a secondary in a year or so. Someone else observed that
they raised only a year's worth of money and from what I've read, they don't
know when they'll be profitable, so it's quite obvious that they're going to
do a secondary and that will be when they really raise some capital.

~~~
dlubarov
It's still a lot of cash left on the table. Why aren't dutch auctions more
common in IPOs?

~~~
adventured
Because the financial companies that control everything on Wall St. hate them.
Box isn't a very powerful company - they're no Google - and can't easily go
against the grain. Box desperately needed that IPO, they're burning very large
sums of red ink.

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dmourati
Big and pleasant surprise here as a boxer. I was hoping for $16.50+. Ya, we
probably left some $$ on the table but keep in mind, we had a rough patch
there this summer and couldn't easily afford more turmoil.

Now time to buckle up and go for it! I'm confident.

------
buro9
The dilution image made by EquityZen is interesting:
[https://pbs.twimg.com/media/B8DCNDoCcAAU3jM.png:large](https://pbs.twimg.com/media/B8DCNDoCcAAU3jM.png:large)

Those last two major investors _lost_ a lot of money.

Is that usual? Do investors usually come in for the long-term even though they
faced an IPO that would lose them a chunk of the value?

~~~
sbisker
IIRC, the last two investors had some sort of deal where if the IPO was priced
at under $20, Box paid them some sort of penalty. (Maybe someone here
remembers the details better than me.) I'm sure they watched their backs on
the paperwork and that any gain like the one the stock is currently seeing is
a win for them.

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JonFish85
Who is buying this stock?! A company that burns through a TREMENDOUS amount of
cash raises enough for just about a year's worth of operations, meaning that
they will almost certainly dilute their stock against next year just to pay
for cost of doing business. Their future consists of insisting that they
aren't "just online storage", and competing on pricing that is trending
towards 0.

I'm not invested in this company one way or another, but it really baffles me
that people think the company is worth investing in. I'm sure I'm missing
something, since I haven't dug deeply into their financials or anything.

~~~
tinkerrr
>Who is buying this stock?! and

>I haven't dug deeply into their financials or anything.

should be mutually exclusive, don't you think? If you haven't looked at their
financials or anything, how do you know whether it is a good investment or
not? You can't just look at 'macro-trends' and determine if individual
companies are a buy or not.

e.g. since 1970s, cigarette industry has been in a steady volume decline.
Guess which stock has been (by far) the best performing stock during since
that period? Yep, Philip Morris (which recently split into Altria and Philip
Morris)

~~~
tdicola
I'm not an expert, but by all accounts the financials for them are somewhat
grim: [http://www.forbes.com/sites/benkepes/2014/03/24/boxs-ipo-
rev...](http://www.forbes.com/sites/benkepes/2014/03/24/boxs-ipo-
revenueexpenditure-mismatches-and-the-cult-of-growth-at-all-costs/) They're
spending more in sales than they're making back in revenue (nevermind profit).
Building a company around spending $2 to make $1 isn't good for the long term
(ask Groupon how that worked out for them).

~~~
mikeyouse
> (ask Groupon how that worked out for them).

They're a $5B company four years after their IPO and are selling ~$2.5B
annually.. not the failure that people keep representing.

~~~
jhonovich
Their revenue is flat and they make no profits. That's pretty terrible in this
market.
[http://finance.yahoo.com/q/is?s=GRPN](http://finance.yahoo.com/q/is?s=GRPN)

