Shares of software company Dropbox Inc. (DBX) increased in price to $23.32 on Monday, December 14. Unconfirmed rumors of a potential sale of the business were the cause. The COVID-19 crisis reinforced the appeal of Dropbox technologies, and investors were likely to assume that major players were involved.
Reports of possible Dropbox sales were initially published in The Information, then on Twitter, and subsequently announced by Bloomberg, which led to stock’s growth. Rumors of potential Dropbox sales are not a phenomenon, because the services of the company are incorporated into the ecosystems of many of its giants.
Sources told The Information that Dropbox consulted investment banks and managers about the prospects of the business in 2021. The outcome could be the sale of the Dropbox business to Salesforce.com, Inc. (CRM) or Oracle Corp. (ORCL). The reality of transferring this business to Austin, Texas, is presented in support of the version about the selling to Oracle. At the same time, Dropbox’s CEO had earlier confirmed a move to Austin.
However, that this is just a rumor and it was a trend in 2020 to move management of its businesses to Texas. In particular, Douglas Merritt, the CEO of Splunk Inc. (SPLK), recently purchased an Austin home. Elon Musk has also announced a move to Texas in early 2020.
Dropbox remains, in any case, a provider of high-demand services for cloud storage. COVID-19, has accelerated key developments in digital transformation such as cloud migration and remote work. A variety of additional services, including mobile applications and data encryption, are also available at Dropbox.
The Dropbox Inc. (DBX) stock was down -1.05% on Wednesday at $24.61, but has gained nearly 16% since the rumor surfaced on Friday, December 11. Since start of the year, the value stock is up more than 37% that raised the market capitalization of the San Francisco, California-based company to $10 billion.