Dropbox jumped 32 percent this week; Zuora and DocuSign rallied too

Victor J. Blue | Bloomberg | Getty Images

Drew Houston, chief executive officer and co-founder of Dropbox Inc., left, and Arash Ferdowsi, co-founder of Dropbox Inc., applaud during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Friday, March 23, 2018.

Dropbox shares soared for a second day in a row, capping a massive rally this week for the cloud storage vendor and other newly public software companies.

Zuora and DocuSign both jumped more than 10 percent for the week. Dropbox surged 32 percent, adding almost $4 billion in stock market value since last Friday.

Investors were actively trading the shares, with Dropbox’s trading volume over the past two days reaching four to five times its average since going public in March.

Alex Zukin, an analyst at Piper Jaffray who covers software companies, said there are a number of factors pushing up the group.

The companies are so new to the market that if an investor wants to build a position, it can have a big impact on the price. They’ve also recently announced their first earnings reports and impressed investors with their financials.

“The fundamentals of these companies have continued to do well,” Zukin said.

Additionally, recent acquisitions like Microsoft’s $7.5 billion purchase of GitHub have inflated multiples, especially for companies like Dropbox, which has been viewed as a potential target. On Monday, Workday shelled out $1.55 billion for analytics company Adaptive Insights.

A new IPO joined the year’s roster of software debuts on Friday. Avalara, a developer of cloud software, surged 88 percent to $44.94 after raising $180 million in a stock sale.