Rackspace IPO: Wall Street does cloud computing
Shares of the San Antonio, Texas-based hosting company fall 20 percent on its first day of trading on the New York Stock Exchange.
Wall Street gave a nod to cloud computing as San Antonio, Texas-based Rackspace Hosting on Friday opened for trading on the New York Stock Exchange following its initial public offering Thursday.
However, its shares fell 20 percent in their first day of trading, which came as a disappointment for the first venture-backed company to go public in nearly five months, according to a MarketWatch report. Rackspace has received backing from Sequoia Capital and Norwest Venture Partners, according to MarketWatch.
The hosting company, which boasts 30,000 customers, is trading under the ticker symbol "RAX." It raised $187.5 million in an offering underwritten by Goldman Sachs, Credit Suisse, and Merrill Lynch. Shares were priced at $12.50 late Thursday, but fell to $10.01 by the closing bell Friday.
Rackspace's cloud computing division, Mosso,recently added a new Web-based control panel and a behind-the-scenes provisioning system to its Hosting Cloud service. The control panel makes it easier for users to set up and manage hosted applications, and includes a new Web-based file manager that gives users access to stored data so that they can create and decompress archives and change access permissions more easily.