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SHAREHOLDER ALERT - Dropbox, Inc. (DBX) - Bronstein, Gewirtz & Grossman, LLC Notifies Investors of Class Action and Lead Plaintiff Deadline: December 3, 2019

NEW YORK, Oct. 11, 2019 (GLOBE NEWSWIRE) -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Dropbox, Inc. (“Dropbox”  or the Company”) (NASDAQ: DBX) and certain of its officers, on behalf of shareholders who purchased Dropbox Class A common stock pursuant or traceable to the Registration Statement issued in connection with the Company's March 23, 2018 initial public offering (the "IPO"). Such investors are encouraged to join this case by visiting the firm’s site: www.bgandg.com/dbx.     

This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws.

On February 23, 2018, Dropbox filed a registration statement for the IPO on Form S-1, which, after several amendments, was declared effective on March 22, 2018 (the "Registration Statement"). On March 23, 2018, Dropbox filed the prospectus for the IPO on Form 424B4, which incorporated and formed part of the Registration Statement. By way of the Registration Statement, Defendants offered and sold 41.4 million Class A shares at $21 per share for over $869 million in gross offering proceeds, which included the full exercise of underwriters' over-allotment option to sell an additional 5.4 million shares. In addition, the Company conducted a private offering of Class A stock concurrently with the IPO in which it sold over 4.7 million shares to an institutional investor for an additional $100 million in gross proceeds. Numerous Company insiders, including certain of the Individual Defendants, also sold stock in the IPO, raking in more than $184 million after applicable underwriting discounts. Underwriters received more than $38.6 million in underwriting discounts and fees from the IPO proceeds, and several, including lead underwriters Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, received tens of millions of dollars more as a result of payments by Dropbox towards a revolving credit facility maintained by these investment banks.

The complaint alleges that the Registration Statement was negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation. Specifically, the Registration Statement claimed that a significant proportion of the Company's registered user base was primed for monetization. It claimed that 300 million of the Company's 500 million registered users had unique characteristics making them likely to be monetized over time, purportedly presenting a "significant opportunity to increase [the Company's] revenues."

The Registration Statement also described Dropbox's business model as involving the "[i]ncrease conversion of registered users to [the Company's] paid subscription plans." It highlighted the Company's increase of paid users from 6.5 million users in 2015 to 11 million users by 2017, representing 69% growth over two years.

In connection with its second quarter 2019 earnings report, Dropbox still claimed to have "more than 500 million registered users" as of June 2019, indicating that the Company had experienced essentially no significant registered user growth since December 31, 2017 - months prior to the IPO. The Company had only converted an additional 2.6 million paid users in the year-and-a-half since the IPO, representing an annualized post-IPO growth rate of only 15% and less than 1% of the "300 million" figure provided in the Registration Statement. Similarly, the Company's revenue growth rate had dramatically decelerated to only 18% for 2019, a sharp decline from the 40% and 31% annual growth rates highlighted in the Registration Statement.

On August 27, 2019, Dropbox stock closed at $17.53 per share, representing a decline of more than 16% from the IPO price.

If you wish to review a copy of the Complaint you can visit the firm’s site: www.bgandg.com/dbx or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Dropbox you have until December 3, 2019 to request that the Court appoint you as lead plaintiff.  A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.

Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique.  Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients.  In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm’s expertise includes general corporate and commercial litigation, as well as securities arbitration.   Attorney advertising. Prior results do not guarantee similar outcomes.

Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
212-697-6484 | info@bgandg.com