U.S. primary market hungry for big tech IPOs

According to sources Dropbox Inc’s IPO, set to close on Wednesdsday, has been oversubscribed.

As per two sources familiar with the matter at hand, Dropbox Inc’s initial public offering (IPO) has been oversubscribed, indicating a healthy demand for big tech IPOs.

Dropbox’s shares expected to start trading on the Nasdaq on Friday.

“It is early to predict the pricing. But what I can say is that from the conversations it seems the market is interested in it and IPO seems to be bright,” said a separate source.

All sources have preferred the cover of anonymity since the IPO pricing process is still underway.

Dropbox’s IPO comes in a challenging week for stocks as the U.S. Federal Reserve is set to raise interest rates on Wednesday, a day before the IPO is set to close.

Tech shares in the U.S. have fallen hard in this opening week, with Nasdaq trending a downward path of more than 2% following reports of Facebook Inc’s latest data privacy issues.

Incidentally, Dropbox and existing stockholders are selling 36 million shares, and the offering could be increased by 5.4 million if underwriters exercise their right to buy more stock.

At the high end of the indicated pricing, it could raise nearly $650 million, making it the largest tech IPO since Snap hit the market just over a year ago.

“The book is oversubscribed, with very good quality,” said a source.

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