Dropbox needs to turn free-riders into fee-payers

Once a company goes public it has a tendency to drop off the radar until the time comes to fire up the marketing machine for a follow-up equity offering. Dropbox listed last March… Shares rose 36 per cent in the first week of trading, taking  the company’s value to $11 billion… A dual class structure gave founders ten votes per share. Everybody else got one. The company should be glad that the spotlight was then turned off. A sharp sell off towards the end of 2018 left the stock trading below its debut price — a fate shared by Spotify, Sonos and most of the rest of the class of 2018. Dropbox now trades at six times expected sales, down from the less realistic ten times sales at listing. That is fair… Providing cloud storage and software for companies and individuals is hardly the hippest of industries. Meanwhile, rivals including Alphabet and Microsoft loom. The most immediate cause for concern is the same revenue growth slowdown that raised eyebrows at the IPO… Halting that slowdown in its top-line means squeezing more from customers. Preferably corporate customers… Dropbox may boast over 500 million users but only 12 million pay. Of those, individuals still make up the bulk. Dropbox needs to come up with more ways to turn free-riders into fee-payers.