Last month, Bryan told Bottarelli Research Options members…
Dropbox isn’t public yet, but when the company goes IPO I think it’s a buy. Not only do I look forward to trading Dropbox, but I also look forward to owning it and watching it grow. Put it on your radar now.
Now with Dropbox DBX – NASDAQ preparing to hit the open market this week, we are reiterating our position to get in early. Given a target valuation of $7 to $8 billion, expect the stock to open between $16 and $18 per share.
On February 6, we entered a SNAP 13.50/14.40 Earnings Strangle for $1.60. One day later, SNAP skyrocketed after beating earnings and we sold for $3.96. That’s a 147% gain.
The very next day, we got positioned in a TWTR 26/27 Earnings Strangle for $2.62. When TWTR blasted off, we sold for $7.76. That’s an overnight profit of 196%.
Founded in 2007, Dropbox is a cloud-storage company with 500 million users across 180 countries. Goldman Sachs and J.P. Morgan are the lead underwriters for the coming debut on the NASDAQ.
So why do we like Dropbox? The tech company sports a positive free cash flow and net-cash balance, as highlighted in a filing with the Securities and Exchange Commission. Last year, Dropbox reported a free cash flow of $305 million, up significantly from $137 million in 2016.
Whereas most other recent tech IPOs are burning through cash, Dropbox generated $1.1 billion in revenue during 2017, up from $845 million in 2016 and $604 million in 2015. And while the vast majority of Dropbox’s customers don’t yet pay for file storage, this free service is a major funnel for conversions to paid subscription plans.
Numbers (and transparency) like this are extremely rare for companies going public. So will Dropbox continue to post legitimate, meaningful revenue growth — as opposed to projections and promises from other initial public offerings?
Only time will tell, but we encourage you to buy DBX on the first day of trading.