In a statement, cloud services firm Rackspace Technology Inc stated, its shares, through its initial public offering (IPO) of $703.5 million, got listed at the bottom end of its target range. The IPO valued Apollo Global Management-backed Rackspace $4.18 billion, excluding debt.
Rackspace Technology had aimed to sell 33.5 million shares at a target price range of $21-$24 per share.
The company’s bucks the recent trend of strong appetite from investors for cloud computing companies with the Wuhan coronavirus driving more demand from businesses to operate digitally and rely on cloud computing for the bulk of their workflow.
Rackspace’s rivals, including Ncino Inc and Kingsoft Cloud Holdings Ltd have seen their share prices more than double since going public earlier this year.
Last year Rackspace had reported revenues of $2.44 billion and a net loss of $102.3 million. While it was exploring an IPO since the last two years, weak organic growth along with accumulated debt amounting to a $4.3 billion leveraged buyout by Apollo in 2016 and subsequent acquisitions, had stopped it from pursuing it.
Rackspace’s shares, which was publicly listed before being bought by Apollo, are scheduled for being listed on the Nasdaq for trading on Wednesday under the symbol “RXT.”
Goldman Sachs & Co, Citigroup Global Markets and J.P. Morgan Securities LLC are among the underwriters for the IPO.