Dropbox, Investors Get Early Nod for $1.38M Deal in IPO Dispute

Dropbox Inc. and investors who alleged the company misled them ahead of a 2018 initial public offering got initial approval of a $1.38 million settlement Tuesday, resolving a would-be class action in federal court in California.

The cash deal “represents approximately 3.8% of estimated maximum damages of $35.5 million” potentially available under the investors’ best-case scenario at trial, they said in a memo filed in support of their motion for preliminary settlement approval in the U.S. District Court for the Northern District of California.

Investors alleged Dropbox made misstatements about the rate at which the cloud storage company’s non-paying customers ...