Box Shares Soar In Long Awaited IPO, Kindling Excitement In The Channel

Cloud storage vendor Box saw its shares rise more than 70 percent during its long-awaited initial public offering on Friday.

Box sold 12.5 million shares at an opening price of $14 per share, up from the expected range of $11 per share to $13 per share, bringing the company $175 million at the Nasdaq's opening bell.

Box shares opened at $20.35 per share and quickly peaked at $24.66 per share, before closing at $23.16 per share. Box shares were steady in after-hours trading.

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This is not Box's first run at an IPO. It first filed for an IPO in March of 2013, which it initially hoped would bring it up to $250 million.

In its S-1 filing, Box said it had over 32 million registered users and worked with over 275,000 organizations as of Oct. 31. However, less than 45,000 of these organizations are paying customers, although this group includes some 48 percent of Fortune 500 companies and 22 percent of Global 2000 companies, Box said.

While Box's revenue has been growing, the company has yet to turn a profit. Box reported revenue for the nine months ended October 31, 2014 of $153.8 million, up 80 percent over the same period of 2013.

For the nine months through October 31, 2014, Box recorded a loss of $121.5 million, slightly better than the $125.2 million loss it recorded in the prior year.

Box's continued investments in acquiring new customers, developing new services, and building out its data center infrastructure will likely keep Box from turning a profit in the near future, the company said in the S-1.

Even so, the successful IPO is a big win for partners and customers, said Dave MacDonald, CEO of Softchoice, a Toronto-based cloud software solution provider and one of Box's largest channel partners.

"What the IPO says, financially, is that a lot of people think Box is a good buy," MacDonald told CRN. "This gives customers fuel to continue investing in Box solutions. The IPO lets us say, this is a good solution."

Softchoice combines Box with its other offerings into unified communications or other solutions, MacDonald said.

"It's a part of Softchoice's collaboration suite which includes document management, version control, and so on," he said. "Box does a good job of managing the solution."