When Is the Dropbox IPO Date?

Dropbox IPO date Dropbox Inc. met with advisors to discuss an initial public offering in August 2016.

That was surprising, considering CEO Drew Houston said in 2015 he had no plans to go public. However, this meeting was not a definitive sign there will be a Dropbox IPO in 2017. So a Dropbox IPO date has not been set.


How Dropbox Works

Rather, the talks appeared to be exploratory, according to Bloomberg. Management wanted a sense of the valuation a Dropbox IPO would receive.

And that's most likely because the valuation is highly contested...

Why the Dropbox Valuation Is Hotly Contested

Dropbox Inc. has watched its valuation soar since its 2007 founding.

In 2011, Dropbox was valued at $4 billion. After a $250 million round of funding led by BlackRock Inc. (NYSE: BLK) in 2014, the company was valued at $10 billion.

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But now, early investors are writing down the value of their Dropbox stock...

According to Business Insider, T. Rowe Price Group Inc. (Nasdaq: TROW) paid $19.10 per share for Dropbox stock in a 2014 funding round.

But in Q4 2015, T. Rowe Price marked down its Dropbox stock holdings by 51%. It was the first time it cut down the share value of the company. As of Dec. 31, 2015, the asset management company valued its shares of Dropbox at $9.40 per share.

And T. Rowe Price wasn't the only company to mark down its share value in the web-storage firm...

In February 2016, Fidelity Investments marked down its shares in Dropbox by 20%. According to The Wall Street Journal, that markdown had wiped out all of Fidelity's gains from its 2012 investment in the company.

So while Dropbox tries to justify its valuation, investors have been asking us one key question: "Should I buy Dropbox stock?"

Here's what you need to know before the Dropbox IPO date...

How to Invest on the Dropbox IPO Date

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Money Morning Director of Tech & Venture Capital Research Michael A. Robinson does not recommend retail investors buy in at an opening IPO price.

But for those who really want to own Dropbox stock on the first day of trading, Robinson has a strategy to minimize risk and maximize profits.

"If folks still want to buy in what we call the after market, then by all means they absolutely must put in a limit order. I recommend no more than 10% above the suggested offering price. That way you don't buy at the high point of the day only to see it fall that session or over the next few trading days," Robinson told me on March 9.

However, Robinson has a better way to play the Dropbox IPO date...

The First Trust U.S. Equity Opportunities ETF Fund (NYSE: FPX) mirrors the broader market for IPOs.

It has 102 holdings, which limits the risk of owning just one stock.

Its biggest holdings include Facebook Inc. (Nasdaq: FB) and PayPal Holdings Inc. (Nasdaq: PYPL), but it also owns recent IPOs like Snap Inc. (NYSE: SNAP).

So while SNAP is down 17.35% since its March 2 IPO, Facebook's 24.78% gains and PayPal's 5.96% gains over the last 12 months can offset those losses.

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