back to article Rackspace IPO bags $704m, proceeds used to pay down debts to private equity backer

Twelve years after first going public, Rackspace Technology has returned to the NASDAQ with more of a whimper than a bang. It has raised $704m, the vast majority of which will be used to pay down debts owed to its private equity backer. The multi-cloud slinger priced the US IPO at $21 per share – the lower end of the marketed …

  1. Anonymous Coward
    Anonymous Coward

    If investors didn't notice the debt on the balance sheet, shame on them. Still, given current interest rates, rasing capital to buy down debt seems backwards. Any predictions on how long before Rackspace is gobbled up by someone else? My money's on 4 years.

    1. Marketing Hack Silver badge

      They are owned by private equity, who I am 90% certain will want to cash out completely in the next 3 to 5 years. So 4 years sounds like a pretty good bet.

  2. Mike 137 Silver badge

    Principal to middle man

    Rackspace used to run servers. Now they apparently intend to sit as middle men between their clients and AWS. Why not just go direct to AWS?

    1. NeilPost Bronze badge

      Re: Principal to middle man

      Perhaps they have the skills to design your Cloud Solution properly and not leave your S3 buckets arse hanging in the Internet.

  3. hoola Bronze badge

    Private Equity Backer

    " Private Equity Backer" three words that should install terror into anyone. Just like "Venture Capitalist".

    There is only ever one winner in these situations and that is the people putting the money in, the broken husk of a company that comes out the other end is just a vehicle for turning assets into cash to be extracted as quickly as possible.

    So many of the current problems we have with technically viable companies failing is because it is now routine for them to be totally screwed over, stripped of any assets and cash then laden with debt.

    What is strange is why the cycle continues? Exactly what hold do these leaches have that allows then to get into them in the first place.

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