What pre-IPO investors think about the price action of BOX after its IPO? [-58% from 52w high]

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JASON LEMKIN

It’s certainly hard to rationalize when we look at Unicorn and start-up valuations.

  • Box has a clear path to $1 billion in recurring revenues and beyond.  It crossed well beyond $300m ARR in mid-’15 and is still growing at a healthy clip:
  • It has a clear path to becoming an iconic company and brand.  That’s an important part of building a billion+ revenue platform.
  • It has a charismatic, compelling CEO with a clear commitment to winning.  Someone people believe in.
  • It has spent, and lost, a lot of money — but losses are coming down.  And wasn’t this OK for Amazon, etc.?

It seems the markets want something with the same growth but a smaller burn.  In this space.  Yes, it’s a competitive space.  But I’m not sure that’s really the issue.  It’s true of many other companies as well.

And oh yeah.  Amazon had to convince people as well, for a while.

In any event, one thing is clear.  Your unicorn, with far less revenues, better be a lot better than Box to deserve that valuation.  And really.  I’m not sure that it is.

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Published on January 17, 2016
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