Feeds

Rackspace shares crater in drab results aftermath

Failure to lassoo public cloud pushes Texans off cliff

  • alert
  • submit to reddit

Reducing the cost and complexity of web vulnerability management

Rackspace's shares have fallen off a cliff after the Texas cloud company reported less than glowing revenues.

In a sign of the fractious affections of the financial market, the company's shares were down almost 25 per cent in trading on Thursday, following Wednesday's lackluster results.

Though Rackspace grew revenue 20.2 per cent and upped income by 17.6 percent, vampire-squid traders punished the firm and lopped off a quarter of its value, with shares closing on Thursday at a nine-month low.

The drop in value was not unexpected – El Reg thought this would happen – but the scale of the sell-off is sure to send tremors through the upper echelons of the company.

As for the reasons behind the sell-off, we suspect it could be the slow quarter-to-quarter growth. Rackspace, though notching up higher revenues, had only managed to grow revenue in its OpenStack-based public cloud business by 4.1 per cent compared to Q4 2012. Growth in its traditional hosting business was a mere 2.2 per cent.

Rackspace share fall

Falling from the clouds

We would note that the slow growth in Rackspace's cloud service contrasts with a heavy multimedia campaign promoting the benefits from its "open sourced" cloud, and with the increasingly vocal and expansive community of people backing OpenStack.

The crimp may also have come from Rackspace implying that it is readying itself for a price war with Google, Amazon, and Microsoft – something which it may not be large enough to do.

"Don't be surprised if we are continually lowering prices on certain products," the company's VP of finance had said. "We are a cost-plus shop." ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
No biggie: EMC's XtremIO firmware upgrade 'will wipe data'
But it'll have no impact and will be seamless, we're told
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.