An enterprise cloud-storage company called Box just filed for an initial public offering.
The company’s numbers do not look great. It did $US124 million in revenue and had a net loss of $US168 million. It spent $US171 million in marketing and sales.
According to CrunchBase, the company has raised $US414 million since its founding in 2005, but it has only $US109 million in cash on hand.
While all of this sounds bad, there’s a small silver lining.
This is an opportunity for you, the public investor, to get in on the ground floor of an up-and-coming technology startup. The risks and rewards are both massive.
Lately, tech companies have raised gobs and gobs of money privately from venture capitalists and private equity groups. Then, when they’re ready to go public, a lot of the phenomenal growth is already gone.
Look at Facebook: It went from zero to $US100 billion before the public had a chance to invest.
With Box, we’re getting an old-school IPO. You have a chance to wager your hard-earned dollars on an upstart tech company. Maybe Box is a disaster, or perhaps it’s the next big thing. Now that it’s going to be a public company, you can vote with your dollars on which it’s going to be.
Of course remember: Picking stocks is a sucker’s game. But so is buying a lottery ticket, and people do it anyway.
The bigger point is that the IPO floodgates are opening and you don’t have to be a mature company to go public.