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Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

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Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#51

Post by 7952 »

PeterisP wrote: post #22

Is their product actually competitive? I had tried it once long ago, but currently I don't see any particular niche where it'd be superior to dropbox/google drive/onedrive/whatever. What am I missing here?

The question is also how does it compare to an on site system. Most large enterprises have invested lots of money in storage systems that are a technically trivial but essential to the business.

Sharing files outside of a company is useful and often problematic. But ironically a lot of large enterprises will block sites like box. Having an ftp style system on your own network is faster to upload and less likely to be blocked by the receiving party.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#52

Post by walid »

arfliw wrote: post #30
walid wrote: post #29

Will this end up devaluing Dropbox in its future IPO?

It will if this IPO is an epic fail, which it looks like it may be...

This is why I'm concerned. With Google pushing the price of online storage down and Box filing for its IPO we might end up with a damaged reputation of online storage companies and result in probably tanking Box's future revenues. The biggest loser will be us consumers since we'll end up with less choices if companies go bust.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#53

Post by dkokelley »

rpedela wrote: post #47
dkokelley wrote: post #43

Earlier quoted context omitted.

I'm curious, is that really as big of a deal as the tech startup makes it out to be? When the team is young, small, and scrappy, I understand that technical skills on the founding team are highly valued, but after growing to nearly 1,000 employees surely the core leadership can hand off the technical day-to-day and platform architecture to a technical SVP.

Technical executives have an innate concept of what is and what isn't possible. This allows them to better evaluate proposals for new features, refactoring systems, etc. This is one reason why I believe Microsoft succeeded under Bill Gates. Due to its size, Microsoft still made a lot of money under Steve Ballmer, who is non-technical, but it definitely lost its place as a technology leader. We will see if the new CEO…

From Ballmer's Wikipedia entry:

"In 1973, he attended college prep and engineering classes at Lawrence Technological University and graduated from Detroit Country Day School, a private college preparatory school in Beverly Hills, Michigan, with a perfect score of 800 on the mathematical section of the SAT... In 1977, he graduated magna cum laude from Harvard University with an A.B. in applied mathematics and economics... He scored highly in the prestigious William Lowell Putnam Mathematical Competition, an exam sponsored by the Mathematical Association of America, scoring higher than Bill Gates."

I'm not sure if he coded, but Ballmer definitely has a mathematical/technical background. I'm not sure technical background is necessarily an indicator of success as an executive.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#54

Post by rpedela »

dkokelley wrote: post #53
rpedela wrote: post #47

Earlier quoted context omitted.

Technical executives have an innate concept of what is and what isn't possible. This allows them to better evaluate proposals for new features, refactoring systems, etc. This is one reason why I believe Microsoft succeeded under Bill Gates. Due to its size, Microsoft still made a lot of money under Steve Ballmer, who is non-technical, but it definitely lost its place as a technology leader. We will see if the new CEO…

From Ballmer's Wikipedia entry: "In 1973, he attended college prep and engineering classes at Lawrence Technological University and graduated from Detroit Country Day School, a private college preparatory school in Beverly Hills, Michigan, with a perfect score of 800 on the mathematical section of the SAT... In 1977, he graduated magna cum laude from Harvard University with an A.B. in applied mathematics and economic…

I really meant engineer when I said technical. Engineers are both technical and are required to think in practical rather than abstract terms. Is that an indicator of success for an executive in general? It depends on the job and the company. But if you are the CEO of a company that produces technology, they yes I think it matters. Executives need other skills too.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#55

Post by namenotrequired »

harvestmoon wrote: post #45
crag wrote: post #42

Earlier quoted context omitted.

It doesn't matter. The street will eat it up. Wall Street is begging tech to produce - even if that means no profit. They will line up to invest. Also, (and probably) because Box is a potential buy-out. Which is probably why they are doing an IPO in the first place. Look.. look at Amazon. That company has never posted a profit. And yet every trader I know is falling over themselves throwing money at them. It's the be…

Did you know that many extremely popular movies did not technically make any profit?

That's also because they mark as much of it as possible as "expense", so that they have to pay as little as possible to those who were promised a percentage of profit.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#56

Post by 31reasons »

Nicholas_C wrote: post #36
31reasons wrote: post #17

Earlier quoted context omitted.

One word: Sales.

Sales, Marketing, Operations, Technology, Finance, HR. Did I miss any?

My point was that enterprise companies need more sales people than consumer facing companies like DropBox.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#57

Post by badman_ting »

neworbit wrote: post #11

I'm somewhat astounded to hear they have 972 employees. I would have guesstimated somewhere below 200. Even with a huge marketing push, I'm a little at a loss for what they all do.

None of the numbers I am reading here make any sense to me, but then I'm just a chump who programs computers all day.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#58

Post by digz »

iambateman wrote: post #12
programminggeek wrote: post #10

So, $250M actually falls short of the $292M they are burning through every year. The net loss of $168M a year means the $250M buys them almost 18 months of runway. Their growth looks less impressive when you consider they spent $292M to only grow revenue $65M. In short, they are spending $5 to make $1. It's possible the customer LTV is actually $6 over a period of years, but they might not be able to borrow enough to…

Could this reflect pressure from investors for a payday? If they feel this is a moment the market believes the business still has "opportunity" even if they don't expect to see it, so they want the liquidity event. Completely agree about the unflippable profitability switch. Profitability is a direction, not a destination.

Of course. The signal here is that investors want to cash out. Even if investors aren't selling shares as part of the offering (haven't read the details yet, so not sure one way or another) and Box is simply issuing new shares and locking up investors for some period of time, this is a path to liquidity for investors.

Generally, selling shares is a signal that insiders view the company as overvalued.. otherwise they would hold. If they needed cash, they would issue debt instruments.

The market is hot on tech, so get out while the getting is good.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#59

Post by simon_ »

I just read Ben Horowitz's new book, and he describes taking Loudcloud public as a Hail Mary because private markets were essentially too smart to give them any more money at a horrible time (while the original dotcom bubble was in the middle of bursting).

Clearly Box is in much better shape, but it's not too hard to imagine that maybe they are rolling the dice on an IPO during a super-hot market in response to feedback from private investors that they were going to have to raise a down (or otherwise disappointing) round.

Re: Box files for $250M IPO on full-year revenue of $124M, net loss of $168M

#60

Post by rm999 »

walid wrote: post #52
arfliw wrote: post #30

Earlier quoted context omitted.

It will if this IPO is an epic fail, which it looks like it may be...

This is why I'm concerned. With Google pushing the price of online storage down and Box filing for its IPO we might end up with a damaged reputation of online storage companies and result in probably tanking Box's future revenues. The biggest loser will be us consumers since we'll end up with less choices if companies go bust.

I think the only losers will be cloud storage companies if the industry is commoditized and margins are pushed towards zero. The industry is only going to grow, and there will always be competition. Meanwhile, cheaper cloud storage is better for almost everyone.

But I don't think full commoditization will ever fully happen - there's a lot of value in trust and dependability in online storage, and these attributes are difficult to quantify. I'm much more likely to go with dropbox or google than some startup, even if the startup is offering much cheaper rates. Also, companies can compete on efficiency and scale, which adds barriers to entry.

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