After filing for an IPO last April in which it hoped to raise $400 million, Web hosting provider (and cloud-computing aspirant) Rackspace finally priced its IPO last night at $12.50 a share. That would have brought in $187.5 million, or half what it was hoping for. But it opened this morning at $10 (ticker: RAX). It’s been been going up since then to about $11.
And Rackspace is a solid company financially. But in this market, any IPO is a sign of hope (there were no VC-backed IPOs last quarter). Rackspace backed off from an IPO once before, in 2000. It’s been champing at the bit to go public for a long time. It looks like the shares are trading up. Let’s see where they end the day.
(Disclosure Rackspace is a TechCrunch advertiser).
Update: Rackspace ended its first day of trading at the same price where it opened: $10. Not a confidence builder for other IPO-aspirants.
Well, that is what happens when the IPO is not publicized enough.
http://tinyurl.com/applenow
IPO vs. acquisition – the options are somewhat confusing to me. If Rackspace hoped for an acquisition I’m guessing they would get more, but they could be on the market for years and go nowhere, just like other companies TC has profiled. But doing an IPO, almost forcing it (when you get 50% of what you wanted, I’d call that forcing it) seems like more of a desperate attempt to get some cash, undervaluing the company.
I’m confused… which is okay, since it’s not a decision I’m faced with yet ;)
Jason Alba
CEO – JibberJobber.com
$10 seems like a good IPO for them
Yep a bargain at half the price the shares will continue to rise…
I’m in at $11.30 – profitable for 5 years now, should be at 20.00 by 2009.
The IPO was actually at $12.50, which is what bidders in the dutch auction paid. Shares opened on the NYSE at $12.50, dropped to $9.75 and are now back above $11.
http://www.data...ed_at_1250.html
Rackspace buys Ruby on Rails hosting company Engine Yard
We went Public Once and looked what happened to us
i really dont understand the point of RackSpace to do this..
… no one really cares about web hosting…
lets face it; it aint a sexy industry.
… if you look at the history of similar stocks – it doesnt really seem worth it.
Akamai is the only thing that looks interesting (and maybe limewire) – heh, and its not even in the same industry(sorta-kinda).
i really do question the wisdom in this move; in this climate.
better now than never i suppose.
LOL it went NOT well!!
Rackspace is a great provider and timing is right for them. With platforms nascent in the grand scheme of things but growing (where Rackspace has an offering, but also faces competition), it’s probably now or never. They need to may hay while the sun shines before the platforms start cutting away at their core. They’ve done great stuff for us and congrats to them.
yeah…
rackspace is cool.
but what the heck does “”platforms nascent in the grand scheme of things but growing “” mean
..sounds like you used a google translator…
“…probably now or never…” shouldn’t be a motivating reason to move a large corporation..
But whatever…
…it doesnt really matter…
… beh…
Interesting timing. I’m wondering if they also felt pressure from smaller on-demand hosting approaches that may not be quite ready for primetime but certainly could be disruptive to the Rackspace brand (current virtual and cloud solutions are running through the Mosso brand today but don’t have the same differentiation). The pressure of Amazon and others promoting the cloud may have them thinking they need to have the dollars to architect on-demand hosting before Amazon and Google leave them on the sidelines
$9.90 … in AH.
Maybe a good bargain once they pull the rug from under the current bag holders and drop it to $5-7 range.
And the news rolls in:
“IPO Tanks”, “Latest to struggle”…
Dedicated hosting is a dying market, which is being challenged by both VPS from the low end and cloud computing from the high end. Although Rackspace has Mosso, I doubt its odds of success against Amazon and Google.
James Kuoski
http://ulimits.com
I am not sure you can call it a dying market when they are seeing 60% growth year over year…
Isn’t Rackspace just a hosting and management company? I know Rackspace is well thought of but these companies are a dime a dozen. I would stay away from this stock for a while.
I like rackspace…as a client they’ve always gone out of their way to make me happy.
I hope this works out for them.
Kudos for correctly using “champing” (rather than chomping).