Rackspace: 8 Firms Start Coverage; Shares Can Use a Lift

The post-IPO quiet period has expired on Web-hosting provider Rackspace (RAX), triggering a flood tide of research from the Street. The stock can clearly use the help: Rackspace went public in August at $12.50 a share, but has never actually traded that high; the stock this morning is changing hands at $9, up 17 cents, or 1.9 percent on the day, but still down $3.50, or 28 percent, since the IPO.

Rackspace has clearly gotten out the message; the reports this morning are remarkably uniform. (And note that all of the firms that launched coverage were involved in the company’s IPO.) In short, they tend to agree that the company’s near-term profitability will be muffled by a capital investment cycle, and they also note that the macro picture is not in their favor. On the other hand, the Street thinks the opportunity in “managed” hosting services in strong, and the analysts point out that the company continues to grow its topline at better than 50 percent a year.

Read the rest of this post

Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »