Rackspace going public

[serverboy]

I heard the other day from a very reliable source that this is a fact and they expect it to happen sooner rather than later. Since they seem to set the bar anyway seems it was only a matter of time. Anyone else aware of this or am I the only one? Searched the forum before I posted and nothing came up. Seems like a significant development to me...

[IH-Rameen]

Any links?

[serverboy]

Any links?

Nope. I got it verbally from a close friend who is neighbors with one for the bankers working the deal.

[Justin M]

Nope. I got it verbally from a close friend who is neighbors with one for the bankers working the deal.

Ah, what a reliable source.

[Robert vd Boorn]

The boyfriend of my neighbours cousin is a big friend of a guy 200 miles from here and he heard that the dad of a friend of one of his friends wiieee!

[ceridius]

I think depending on who the source is it might be accurate.

[Armadillos]

What I'm wondering is that wouldn't this information be considered "inside information", which by SEC law, is highly illegal to be released...

But, if you want to know if a company is going public or not, look to see if they put an IPO (Initial Public Offering) out there. There are websites out there that track this information.

[FHDave]

it your nick were "serverman", people may trust you more

[KarlZimmer]

What I'm wondering is that wouldn't this information be considered "inside information", which by SEC law, is highly illegal to be released...

But, if you want to know if a company is going public or not, look to see if they put an IPO (Initial Public Offering) out there. There are websites out there that track this information.

WHat is the inside information? The stock isn't publicly traded, so there is no inside and outside, being privately owned all the information they want can be kept "inside." The IPO will be a publicly announced event, this would simply be an indication to look out for that future event, there is really little to be gained or lost from that information being out there, unless they're just looking for a private buyer.

[ewhost]

I call BS.
If it's true, best to keep it secret or sell the info instead of posting it here.
There's no reason to actually announce it here UNLESS it's by rackspace agent trying to garner public opinion.

[Rob2132]

So? While they might be seen as a reliable company in this field, they aren't the biggest, you don't hear about them like you would for some company like Google. I really don't imagine you'd be making a lot by investing in Rackspace to be honest. Though, if you believe they are a solid company that you'd like to be a part of and maybe make a profit and believe they'll grow your portfolio, then by all means, got for it. Beyond that, I really don't see the big hoopla.

[DATARTIM]

I think its highly unlikely rackspace would go public, especially given that the market is up and down like a yo-yo with it mostly being down.

[utropicmedia-karl]

It won't be successful. No IB would _touch_ a rackspace IPO, or any other DC provider for that matter.

Stop cluttering the board with bs......

[Karl Austin]

It won't be successful. No IB would _touch_ a rackspace IPO, or any other DC provider for that matter.

Funny, I could swear that TeleCityRedbus have just gone public again Also it's rumoured that Interxion (20 facilities around EU) are looking to go public as well.

[ceridius]

It won't be successful. No IB would _touch_ a rackspace IPO, or any other DC provider for that matter.

Stop cluttering the board with bs......

I would have to disagree. I think they might do pretty well

Public Company Valuations (as of 11/8/2007):

The table below summarizes the current trading values for some of the public hosting companies.

Annualized
Revs ($ MM) Enterprise Value/Ann Rev Multiple Chg since 1/5/2007
Hostopia (Shared) $25.1 1.8 +11%
Peer1 (Dedicated & Colo) $75.2 2.7 +146%
Navisite (Complex managed & other) $138.8 3.2 +16%
Savvis (Complex managed & other) $761.2 3.0 +0%


good luck trying to get that kind of multiple trying to sell a private hosting company.

Look at Navisite I think they compare closest trading at 3.2x annualized rev where the private market space is trading at about 1-1.2x

[lockbull]

It won't be successful. No IB would _touch_ a rackspace IPO, or any other DC provider for that matter.

Stop cluttering the board with bs......

Don't quit your day job...

Let's see, a company with about a $400 million runrate for calender year 2008 (which makes their revenue considerably higher than Navisite, S&D and Internap, and just a bit less in revenue than Equinix, though Rackspace has much higher margins than a "DC provider"), showing positive net income with strong growth every quarter, and has a former i-banker from Merrill as it's CEO. Who would want that deal? From what I understand, just about everyone inside of Rackspace wants an IPO and they have been resisting offers for several years (and had in fact filed to go public back in 2000 but withdrew due to market conditions). Graham Weston, the majority shareholder, has resisted it because he doesn't want the scrutiny and overhead of being a public company. But their VC investors and the employees are certainly hoping for a liquidity event to unlock the value of their shares.

[lockbull]

And now it's official:

http://www.rackspace.com/information...ase.php?id=204

This is definitely a top tier IPO; you don't get Goldman, Merrill & CSFB as your I-bankers unless it's a class A offering.

[DATARTIM]

Well I say...

This is going to be very interesting to see how this unfolds. Still strange timing.

[marcbarak]

This is true - they filed a S-1 registration with the SEC (Security & Exchange Commission) www.sec.gov on Friday - see http://sec.gov/Archives/edgar/data/1...091225/ds1.htm

That is the first step required by law to go public - no company releases into the public record all that previously private data without the fact they have NO choice as part of their filings

[RossH]

Well RackSpace is a very good company however I would be kind of skiddish investing in them just due to the fact when they have massive outages like they did a few months ago you'll see their stock tank as well.

[lockbull]

Well RackSpace is a very good company however I would be kind of skiddish investing in them just due to the fact when they have massive outages like they did a few months ago you'll see their stock tank as well.

Out of curiosity, do you have any empirical data to support that assertion, i.e. that that stock prices for a datacenter operator have "tanked" after an outage? All the public datacenter operators have had what I would term "significant" facility outages (30+ minutes) at one or more locations (NaviSite, Equinix, S&D, etc.); have their stock prices taken a significant hit after that? Obviously if the SLA credits materially impact earnings it would have an effect on the stock price (witness Internap with the mangled integration of the VitalStream CDN), but I doubt many institutional investors are surfing WHT, ValleyWag or TechCrunch for downtime reports of various hosting companies because some Web 2.0 darling is down.

[RossH]

Out of curiosity, do you have any empirical data to support that assertion, i.e. that that stock prices for a datacenter operator have "tanked" after an outage? All the public datacenter operators have had what I would term "significant" facility outages (30+ minutes) at one or more locations (NaviSite, Equinix, S&D, etc.); have their stock prices taken a significant hit after that? Obviously if the SLA credits materially impact earnings it would have an effect on the stock price (witness Internap with the mangled integration of the VitalStream CDN), but I doubt many institutional investors are surfing WHT, ValleyWag or TechCrunch for downtime reports of various hosting companies because some Web 2.0 darling is down.

Sure if you go view SVVS at around Jan 02 you can see their stock take a little bit of a hit because of their outage. You also pointed out another perfect example of Internap's Vitalstream sanfu. Another example is Navisite's Nov 6th outage, is that enough data for you?

Not to mention that hosting stocks have been pounded in the market.

INAP -%77
SVVS -%63
NAVI -%58
AKAM -%35

Edit:

Outages affect stock prices, please also take a look at T around Jan 31st and the stock slide after because of the 3G/EDGE outage.

[BudWay]

And now it's official:

http://www.rackspace.com/information...ase.php?id=204

This is definitely a top tier IPO; you don't get Goldman, Merrill & CSFB as your I-bankers unless it's a class A offering.

Boy I would like to see faces that said this was bs...

[cloudrck]

Wow, a guy with 11 posts with VERY reliable information. Who'd thunk?

[cpureview]

Commentary on the IPO and a bit of further information is here:

http://www.thewhir.com/blogs/Derek-V...od-for-Hosting