This post was originally published on this site
https://i-invdn-com.akamaized.net/news/LYNXNPEB9606Q_M.jpg
The stock was trading at $17.00 on Wednesday, compared with its IPO price of $21.00 per share.
The lacklustre IPO and debut bucked the recent trend of strong appetite from investors for cloud computing companies as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow.
Rackspace, which leases server space and helps corporations store and access data in the cloud, sold 33.5 million shares at the bottom end of its target range of $21.00 to $24.00 per share, valuing the company at $4.18 billion, excluding debt.
Cloud companies such as Ncino Inc (O:NCNO) and Kingsoft Cloud Holdings Ltd (O:KC) have seen their share prices more than double since going public earlier this year.
Rackspace had been exploring an IPO for the last two years, but its weak organic growth and large debt due to its $4.3 billion leveraged buyout by Apollo in 2016 and subsequent acquisitions had stopped it from pursuing an IPO earlier.
Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and J.P. Morgan were the lead underwriters for the IPO.
