Online file sharing service Box’s shares surged more than 65 percent during their first day of trading on Friday, recording the latest splash in a red-hot market for deals in technology sector.
The company’s shares closed at USD 23.15 per share on Friday amid investors assessing the worth price of the money-losing firm. The initial price of the company’s 12.5 million sold shares was fixed at USD 14 per share, for the agreement that had been delayed for long.
The stock’s strong reception at the red-hot market clearly shows how extreme appetite is important for the Internet-based firms and a portion of a disturbing trend of money-losing firms scoring high from initial public offerings (IPO).
Renaissance Capital, a provider of IPO investments, says the technology sector has remained the second largest source of initial public offerings (IPO) for over the past 12 months as far as number of offerings is concerned.
In the past 12 months, the technology sector has witnessed a total of 56 technology initial public offerings. These IPOs have collectively raised USD 32.5 billion.
Box, which allows other companies to store their data online just like Dropbox, has customers like General Electric. But the firm is also playing in a space belligerently targeted by technology companies having much deeper expertise like Google and Microsoft.
The company has raised USD 175 million from its initial public offerings. The insiders said that Box will be utilizing this money as it burns cash at a rapid pace.
Meanwhile, the analysts recommended that the investors must give a deep thought before actually making a jump into the box.