Dropbox Stock Has Been Volatile since Its March 23 IPO



Stock up ~43% since its IPO

Dropbox (DBX) stock has been listed on the NASDAQ since March 23. Dropbox priced its IPO at $21.00 per share. On its listing day, the stock closed 35.6% higher at $28.48. Dropbox stock touched an all-time high of $43.50 on June 18, and it’s since fallen more than 30.0% to close at $29.97 on August 3.

Dropbox announced an improvement in its storage technology to enable expansion of applications. Dropbox stated that it aims to integrate its shingled magnetic recording (or SMR) drive technology with its Magic Pocket storage infrastructure platform. This move drove the company’s stock higher between May and June.

This technology is expected to increase storage density and reduce a company’s data center footprint, resulting in cost savings. Dropbox claims to be the first company to deploy SMR technology at scale.

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Stock fell 17% in July

Dropbox stock declined ~17.0% in July after a Harvard Business Review report stated that Dropbox gave non-anonymous user access to researchers. In the report published on July 20, the Harvard Business Review stated, “Dropbox gave us access to project-folder-related data, which Dropbox had aggregated and anonymized, for all the scientists using its platform over the period from May 2015 to May 2017 — a group that represented 1,000 university departments.”

This action appeared to indicated that Dropbox’s user data was compromised, resulting in a drop in its stock price. On July 26, Dropbox and the Harvard Business Review clarified that its user data was always anonymous and issued a correction in the report.

The data privacy of users is regarded as a critical source of information. Any leak in data is regarded as a serious breach, as we saw in the case of Facebook (FB) and Cambridge Analytica. Dropbox’s clarification on this issue and an analyst upgrade has driven the stock price up by 12.0% in August.


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