Box Soars 66% in Debut; CEO Levie 'Bet His Life' on Company

Cloud service company Box (NYSE:BOX) soared 66% in its long-anticipated public debut on Friday. After pricing shares at $14, the stock traded as high as $25 mid-day and closed at $23.23.

Los Altos, CA-based Box raised $175 million in its offering, after releasing 12.5 million shares. This was more than expected, as the proposed range for the IPO was $11 to $13 per share.

The company first released its S-1 filing in March of last year, but waited ten months to IPO.  “We take a very long term view,” CEO Aaron Levie told, regarding the delay. Box, which was founded in 2005, waited to go public until “both we were ready as a company and the market was ready.”

Competitors Dropbox and Egnyte are also in the IPO pipeline. Public companies in the space include Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and EMC (NYSE:EMC).

Levie spoke of the competitive landscape, and said that he’s confident that Box is “one of the only solutions that’s able to do extremely well.” He said that Box “develops technology that makes it incredibly secure” and that they are looking to address the “disparate needs of different industries.”

When Box initially filed in last year, the unprofitable company faced widespread criticism that it was spending too much on sales and marketing. But, while still unprofitable, the company showcased improved financials in its updated December filing, showing both revenue growth and a reduction in relative marketing spending. Losses narrowed to $45.4 million in the quarter ending October 31st, which is down from $51.4 million in the same period a year before.

Egnyte CEO Vineet Jain told that his company aims to IPO in 2016, but he had kind words to say about his competitor, hoping that a favorable Box valuation will help Egnyte. “Showing this market pop that indicates there is a lot of pent up demand” for the cloud storage business, he said. “My hope is this initial pop and exuberance persists for a long time.”

Accellion CEO Yorgen Edholm said that his company is also celebrating competitor Box’s successful debut because it “validates this industry and proves that it’s catching fire,” adding that “investors and enterprises alike now recognize the value and importance of secure collaboration and file sharing.” Edholm expects to see “quite a few more companies jump on the IPO bandwagon in the next 12 months.”

Just 30-years-old, Box CEO Aaron Levie is facing some of the same skepticism about his ability to run a public company that Facebook (NASDAQ:FB) CEO Mark Zuckerberg did when Facebook went public in 2012. When asked about these concerns, Levie told that he’s committed to making Box a success because he and the company’s co-founders “dropped out of college to essentially bet our lives on this category.”

Co-founder and CFO Dylan Smith added “we’ve been doing this now for ten years,” and are “extremely proud of what we built.”

Box raised about $543 million in capital prior to its IPO. Top stakeholders include Draper Fisher Jurvetson, U.S. Venture Partners, Coatue Management, and General Atlantic. CEO Aaron Levie only has a 3.8% stake.

Underwriters include Morgan Stanley (MS), Credit Suisse (CS) and J.P. Morgan (JPM).