Why investors have suddenly become wary of putting money in cloud companies
June 12, 2014
Grazed from EconomicTimes. Author: David Gelles.
Box, the Silicon Valley, cloud storage company run by 29-year-old Aaron Levie, was on the cusp of going public earlier this year. Until it wasn’t. In March, Box filed a prospectus with the Securities and Exchange Commission, indicating it would try to raise up to $250 million in an initial public offering. A recent financing round had valued the company at $2 billion. The stock markets were soaring.
Then the shares of several big technology companies faltered. The Nasdaq composite index dipped 7 percent in a matter of weeks. Box’s IPO didn’t happen. The company has yet to file an amended prospectus. To some, Box’s postponed IPO was simply a sign of a weakened appetite for technology stocks…
But others wondered if investors were reassessing the durability of its business model, along with the business plans of other cloud companies…
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