Rackspace IPO Flops As Trading Begins

Rackspace Technology  returned to the public market Wednesday with an initial public offering that underperformed. The Rackspace IPO raised $704 million but priced at the low end of its range…

The Rackspace (RXT) IPO offered 33.5 million shares at $21, the low end of its price range of $21 to $24. It began trading on the Nasdaq under the ticker RXT.

Rackspace stock plunged 18.6% from its IPO price, trading near 17.10, during afternoon trading on the stock market today.

The company provides cloud technology and management services for its customers. It was taken private in 2016 by Apollo Group Management in a buyout valued at $4.3 billion. Rackspace has more than 120,000 customers, large and small, worldwide.

Its partners include Amazon (AMZN) Web Services, Microsoft (MSFT) Azure, Google Cloud by Alphabet (GOOGL) and VMware (VMW). Others are Oracle (ORCL), Salesforce (CRM) and SAP (SAP).

What’s In The Rackspace IPO Filing?

“We are a leading end-to-end multi-cloud technology services company,” the company said in the Rackspace IPO filing.

Based in San Antonio, Rackspace designs, builds and operates cloud environments for customers across all major technology platforms.

“We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products and adopt innovative technologies,” it said.

In 2019, the company reported revenue of $2.44 billion, about the same as the prior year. It showed a net loss of $102 million, vs. a $470.6 million loss a year earlier, according to the Rackspace IPO filing.

Revenue Up, Losses Down

For the first quarter, Rackspace reported revenue of…

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