Box Shares Are Soaring, And My Head Feels Like It Is Going To Explode
Despite the warning from the Vulture this morning, shares of Box, the massively money-losing tech company that went public this morning, have been popping all day. By this afternoon they were up about 70 percent from the listing price.
The stock was priced at $14, opened at $20, and traded above $24, giving Box a market value of nearly $3 billion.
Bear in mind: From 2011 forward, Box has lost $466.1 — nearly half a billion dollars! — while generating $361.1 million in revenue.
But maybe profitability is just around the corner? Er, no.
In fact the Box prospectus says, right there in big boldface print: "We have a history of cumulative losses, and we do not expect to be profitable for the foreseeable future."
Translation: This is a big huge black pit filled with hellfire; won't you please throw many of your moneys into it?
Then again, the kind of people who are buying this stock are probably not people who read the prospectus. Nor are they the type who invest for the long term. By this afternoon, some 38 million shares had changed hands. That's more than three times the total float of 12.5 million shares.
The question is who will get stuck holding the hot potato when the churning stops.
We obtained this video of frenzied mom-and-pop investors racing to buy shares.
[Photo: Box]