Box Might Put Its IPO Back In The Box

Box was rumored to have filed to go public on January 31. On March 24, its S-1 dropped, showing the world quick revenue growth but stubborn and expanding losses.

Today the Wall Street Journal reports that Box could go public in June, far later than the market previously anticipated. Quartz, citing sources, reported today that Box could go public around May 26.

Why the delay? Both the Journal and Quartz cite a difficult market moment. Technology stocks that could be viewed as analogous to Box have taken a drubbing in the public markets. And other technology stocks that are based on less-similar businesses, but also bear the marks of investor optimism regarding potential future revenue growth, have seen their prices fall.

If they fall, Box’s IPO share pricing falls.

So, for Box to perhaps wait a few weeks in hopes of things swinging positive again is not a surprising idea. A source with knowledge of the venture capital markets and IPO timings told TechCrunch that, provided that Box hadn’t yet embarked on its road show to hawk its shares to investors, the delay is less a story than it might appear at first blush.

I have not been able to uncover any information indicating that Box’s road show had in fact started. According to Fortune’s Dan Primack, while some sales calls have been made, they were not official calls fro the company:

As such, Box’s road show would have been not initiated. So, Box didn’t go out there, try to road show, and run home, tail-tucked.

What else could have happened? Another possibility could be that Box simply didn’t intend to go public as quickly as possible, given its fiscal calendar. As Box reported in its S-1: “We recently changed the end of our fiscal year from December 31 to January 31.”

That means today is the last day of Box’s fiscal first quarter. Would it have embarked on a road show before it had its first-quarter numbers in mind? Perhaps, but I think it would have been an odd event. Box will presumably now begin wrapping its first quarter accounting, and update its S-1 when those figures are ready.

Assuming a quick pace, a late May IPO seems possible. If not, early June would be reasonable provided that Box isn’t worried about market conditions. If it is, then it could delay at its whim.

That said, there is a cost at play: The longer it waits, the more investors presume that it is waiting until either they are willing to pay more for the firm or that it simply can’t support the valuation it wants to go public for. Neither paints Box in a light that investors would find seductive.

Another firm that has fast top-line expansion and large bottom-line losses, AeroHive, recently indicated that during its road show it noticed “deterioration” in the market. Box would surely have noticed.