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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

#61

Post by qq66 »

maaaats wrote: post #14
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.

Isn't that insanely many people compared to what they deliver? Many more than DropBox (300+?) and JottaCloud (~10) without me being able to see why. Edit: You were before me, so added my comment as a reply to you instead.

Are you fully aware of what they offer? They have all kinds of well-known and arcane certifications, integrations with a few dozen products that are only relevant to large enterprises, a pretty big third-party ecosystem and the API to support them, and the large team required to sell and support these tools.

It's not just file storage for five bucks a month.

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

#63

Post by batiudrami »

vikp wrote: post #48
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…

Amazon had a crazy long term focus: http://www.fool.com/investing/general/2013/11/04/why-amazon-... . Their lack of a profit seems to be intentional, in that Jeff Bezos is willing to sacrifice short-term profit for a long-term vision. So the traders are actually making a rational choice here.

Plus it's a really weird comparison. One of the oldest, and by far the most successful online marketplaces with long term vision vs. a cloud storage startup who is competing against some major players (Google, Dropbox) and is burning through money. I'm unsure of Box too, I just don't see how Amazon is a reasonable comparison.

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

#64

Post by trhway »

erichurkman wrote: post #32
john_b wrote: post #18

Earlier quoted context omitted.

My understanding of Box is that they focus on enterprise customers more heavily than their competitors. Given upgrade cycles in many large companies, a LTV > $5 is possible. The difficulty and expense of selling a new product to large companies might also explain the marketing budget.

But how long will it take to get a LTV that is going that high, meanwhile cloud storage costs across the board have a downward price tendency? Or, could Box raise prices significantly enough on some customers to lessen their losses without sending too many customers to competitors?

sounds like very tough situation, worst of both worlds - enterprise sales of a product where competition is on price. Such business have no chances i think until it has a "self-service", read dirt cheap, sales process.

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

#65

Post by jaequery »

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…

anyone know if i can short this stock? i know where this ones heading ...

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

#67

Post by rplnt »

jedberg wrote: post #5

$250M feels tiny for a tech IPO (and for an IPO in general). Does anyone have any data around this?

AVG Technologies had $128M IPO with over $200M in revenue at that time and being profitable for years prior. Also had 20 years of history and was one of the few leaders on the market with over 100M active customers/users and growing.

What company does, how it operates, or how profitable it is doesn't matter. For highly valued (read overvalued) IPO you need to be on the spot. Think Twitter, Zynga, Groupon. They were all at loss IIRC. People buy these sort of stock for short periods of time so they go big and then burst few months or years later.

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

#68

Post by crag »

ryana wrote: post #50
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…

"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 belief in investing in something"sexy", and "new"." This is a) a lazy narrative that simplifies the realities of Amazon's business models and b) flat out false. The last 4 years Amazon has posted EBITDA of $1.497B, $934M, $544M and $506M (2010-2013, respectively). (1)…

Actually I do stand corrected.. cause Amazon DID post a profit, after several quarters of almost no profit or straight-up losses (for the holiday season).

Also this crap about revenue before taxes, interests - etc (your EBITDA) is just that, crap. It's unreliable because a company can decide what is (and what is not) included in the calculation. Of course, this means that a company can change (and many do) this "measure" from reporting period to reporting period. Remember the Dot-Com bust? Companies that had no value, or any chance of value, looked great on paper due to the EBITDA.

EBITDA does not represent a company's cash. More like it's cash flow that it has to service debt (and as I already said, that calculation can be manipulated by the company). It was designed for this purpose in the 80's - the leverage buy-out decade.

// END of rant

EBITDA doesn't measure profit. Or the ability to earn profit. And frankly, it's a cop-out to state to prove a company's value.

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

#69

Post by crag »

batiudrami wrote: post #63
vikp wrote: post #48

Earlier quoted context omitted.

Amazon had a crazy long term focus: http://www.fool.com/investing/general/2013/11/04/why-amazon-... . Their lack of a profit seems to be intentional, in that Jeff Bezos is willing to sacrifice short-term profit for a long-term vision. So the traders are actually making a rational choice here.

Plus it's a really weird comparison. One of the oldest, and by far the most successful online marketplaces with long term vision vs. a cloud storage startup who is competing against some major players (Google, Dropbox) and is burning through money. I'm unsure of Box too, I just don't see how Amazon is a reasonable comparison.

I didn't mean to compare Amazon to Box. I mentioned Amazon to point out another tech company that is a darling of Wall Street - despite unprofitability (generally).
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