Tim Bradshaw Box’s IPO plans boxed in by choppy markets

What a difference a month makes. When Box filed to go public in late March, hot tech stocks such as Google, Facebook and Tesla were trading at close to their all-time highs.

Now, the cloud storage company’s timing looks a little less fortuitous. A month after the “tech rout” began, the financial markets don’t look quite so welcoming to a fast-growing but heavily loss-making new listing, however ‘sexy’ its enterprise technology might be.

So it is perhaps no surprise that Box not rushing ahead with its stock-market debut. The minimum 21-day window between posting its S-1 and beginning its roadshow has been and gone, but as long as the markets remain choppy, don’t expect to see Box test investors’ appetites anytime soon.

People familiar with Box’s plans confirmed earlier reports in Quartz and the WSJ that the same stock-market gyrations that have knocked a fifth off the valuation of Workday, another hot business IT firm, have caused chief executive Aaron Levie to pause. While Box might have begun its roadshow by the end of April, it has little to gain and much to lose by pushing ahead right now, they say.

While both May and June have been mooted as possible moments for its initial public offering, no date has been decided upon, and will depend on whether market conditions improve.

Box, which is in its pre-IPO quiet period, declined to comment issued a statement on Thursday morning, the day after this story and others were first published:

“Our IPO has never had a set date. Since filing, we’ve planned on going when it makes the most sense for the market. That plan hasn’t changed.”

In the meantime, the cloud computing market continues to grow apace. Microsoft said last week that revenues from its Azure cloud platform were up 150 per cent, with 1m new users of its subscription Office service during the quarter. Earlier this month, Dropbox chief Drew Houston talked openly about his preparations for going public, as he revealed 38 per cent growth in active users to 275m in fewer than six months.

Box is hoping to raise $250m in its IPO but warned in its prospectus that its losses grew from $112m to $168m last year, with no profits expected in the “foreseeable future”. With those losses, it cannot wait around for a new injection of cash forever; but after raising $100m in December, there is no immediate urgency either.