Feeds

Rackspace shares crater in drab results aftermath

Failure to lassoo public cloud pushes Texans off cliff

  • alert
  • submit to reddit

Application security programs and practises

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." ®

Eight steps to building an HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Apple fanbois SCREAM as update BRICKS their Macbook Airs
Ragegasm spills over as firmware upgrade kills machines
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.