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  1. #1

    Rackspace going public

    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...

  2. #2
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    Any links?

  3. #3
    Quote Originally Posted by IH-Rameen View Post
    Any links?
    Nope. I got it verbally from a close friend who is neighbors with one for the bankers working the deal.

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    Quote Originally Posted by serverboy View Post
    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.

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    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!

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    I think depending on who the source is it might be accurate.
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  7. #7
    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.

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    it your nick were "serverman", people may trust you more
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    Quote Originally Posted by Armadillos View Post
    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.
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  10. #10
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    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.
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  11. #11
    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.

  12. #12
    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.
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    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......

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    Quote Originally Posted by utropicmedia-karl View Post
    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.
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    Quote Originally Posted by utropicmedia-karl View Post
    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
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    Quote Originally Posted by utropicmedia-karl View Post
    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.

  17. #17
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    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.

  18. #18
    Well I say...

    This is going to be very interesting to see how this unfolds. Still strange timing.
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  19. #19
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    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
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  20. #20
    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.

  21. #21
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    Quote Originally Posted by RossH View Post
    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.

  22. #22
    Quote Originally Posted by lockbull View Post
    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.
    Last edited by RossH; 04-27-2008 at 08:15 PM.

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    *

    Quote Originally Posted by lockbull View Post
    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...

  24. #24
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    Wow, a guy with 11 posts with VERY reliable information. Who'd thunk?
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  25. #25
    Commentary on the IPO and a bit of further information is here:

    http://www.thewhir.com/blogs/Derek-V...od-for-Hosting
    Web Hosting Talk RULES!

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    It appears that Rackspace has upgraded its fanatical support to now cover a promise on 5 different elements. Well, Rackspace are offering this level of service in the UK. I'm not aware of any other hosting company that is making such a big committment to support its customers.

  27. #27
    Quote Originally Posted by homer2 View Post
    It appears that Rackspace has upgraded its fanatical support to now cover a promise on 5 different elements. Well, Rackspace are offering this level of service in the UK. I'm not aware of any other hosting company that is making such a big committment to support its customers.
    honestly - those 5 elements are customer service and rentention 101

    love seeing rackspace go public. They are a great example of how to grow a very large business based on value of service vs on price of service...

  28. #28
    Has anyone heard what they hope to set their initial offering at?

  29. #29
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    the normal process would entail 3-6 months before they actually set the date and the price
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  31. #31
    Wall Street has not traditionally seen hosting companies as "darlings." This IPO will be interesting to watch and I hope it's a good thing for the industry.

    Steve
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  32. #32
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    I don't know about the industry, but it's rarely good for customers.
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    Quote Originally Posted by KDAWebServices View Post
    I don't know about the industry, but it's rarely good for customers.
    I don't see how it wouldn't be good for customers. If this involved a merger or acquisition I'd agree, but hundreds of millions in additional capital would generally be seen as good, not bad.
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  34. #34
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    If you look at GoDaddy's filing that they quickly away from and read the Wall Street reports on same you'll see one of the big issues the "Street" has is the revenue having to be amortized over the period the revenue covers - that the street has not grasped and become welcome to
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    I wonder which stock exchange group will pick them up.
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  36. #36
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    NASDAQ would be the safe bet as as a tech company
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  37. #37
    It won't go on the NYSE, thats for sure.
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  38. #38
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    Quote Originally Posted by KarlZimmer View Post
    I don't see how it wouldn't be good for customers. If this involved a merger or acquisition I'd agree, but hundreds of millions in additional capital would generally be seen as good, not bad.
    Because it all comes down to stock price is what matters - doesn't matter if that means actions that aren't beneficial to customers or the company as a whole, short term earning and stock price will rule from IPO onwards. In the DC space it has usually meant that customers will see large %age increases in their monthly costs leading up to the IPO, "look at our revenue growth last quarter all you investors, isn't it good?".
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  39. #39
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    It won't go on the NYSE, thats for sure.

    Actually, it is going on NYSE, ticker symbol RAX.

    I don't have the requisite 5 posts needed to provide the link to the article but if you Google "RAX NYSE" you'll see.

    The article I wanted to link can be found at datacenterknowledge.com/archives/2008/Apr/25/rackspace_confirms_400_million_ipo.html

  40. #40
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    Quote Originally Posted by KDAWebServices View Post
    Because it all comes down to stock price is what matters - doesn't matter if that means actions that aren't beneficial to customers or the company as a whole, short term earning and stock price will rule from IPO onwards. In the DC space it has usually meant that customers will see large %age increases in their monthly costs leading up to the IPO, "look at our revenue growth last quarter all you investors, isn't it good?".
    I don't recall that happening when Peer1 went public, or Google, or about a dozen other companies I can think of from various fields. I can see it happening with some companies, but then there are those who actually consider long term gains/increases, those who see that what they're already doing is working and don't change. I'm not saying it is impossible to happen, but it isn't as if Rackspace isn't already operating with high profit margin, charging high rates, etc.
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