What’s Inside the Box IPO? The Pros and Cons of Investing

Box is growing its revenues by double digits and are profitable on an operating level, net-net they are losing money.
What’s Inside the Box IPO? The Pros and Cons of Investing
Box, Inc. Chairman, CEO & co-founder Aaron Levie waits for his company's IPO on the floor of the New York Stock Exchange, Friday, Jan. 23, 2015. AP Photo/Richard Drew
Valentin Schmid
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The cloud file sharing start up from California blew the lid off the box on its trading debut Jan. 23. It went up a whopping 66 percent, raising $175 million. Here are some things to consider when investing in the hot start up.

Risk

Veteran Angel Investor Peter Cohan is skeptical. “It has a lousy position in a terrible industry. The cloud storage industry is in a big industry it’s going fast but its’ dominated by companies who are giving away the product at a low price,” he says.

According to industry research company IDC, Box is number three with a market share of 14 percent behind Dropbox (27) and Microsoft (17). While Dropbox provides free file sharing services for mostly consumers and is small in the corporate space, Box caters to businesses and boasts to have 48 percent of Fortune 500 companies signed up.

Amazon has no interest in making a profit, Microsoft is growing in this area, IBM is going into the business. I don't see a way to make money. It's not an attractive industry.
— Peter Cohan, Investor
Valentin Schmid
Valentin Schmid
Author
Valentin Schmid is a former business editor for the Epoch Times. His areas of expertise include global macroeconomic trends and financial markets, China, and Bitcoin. Before joining the paper in 2012, he worked as a portfolio manager for BNP Paribas in Amsterdam, London, Paris, and Hong Kong.
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