Dropbox doldrums could get worse as insiders get chance to sell

Insiders at Dropbox will get their first chance to sell shares on Friday. (Bloomberg pic)

SAN FRANCISCO: Dropbox Inc. could be subjected to a bout of selling with a lockup on the stock expiring Friday.

Some employees and insiders at the cloud-data storage company will get their first chance to sell since the March initial public offering. About 18% of outstanding shares are held by insiders, according to data compiled by Bloomberg.

Until recently, Dropbox had been one of the best performing IPOs of the year, with the stock doubling in less than three months. The San Francisco-based company’s shares have languished since the disclosure that Chief Operating Officer Dennis Woodside plans to leave, which overshadowed second-quarter earnings and revenue that beat expectations on Aug 9. The stock is still up 34% since the March 22 initial offering.

The number of shares sold short has increased in the past two weeks and now represents about 20% of shares available to trade, according to Markit data. That’s down from a record high of 26% on the day of the second-quarter earnings release.