Rackspace Does its IPO

August 8th, 2008 at 12:00 am
 


It’s been a scaring fact that there were no IPO’s (Initial Public Offering) in the Tech/Web2.0 industry since the start of 2008.  Many have been fearing the worst, some even calling it the bursting of the bubble (again).  But the silver lining has shown itself on the dark looming cloud of closures and bankruptcies.  One company from the web2.0 made its IPO today.

It’s unexpected though, well, considering that there are a lot of web companies in the pipeline that are excitingly expecting to make an IPO, there are the social networks, voip’s, instant messaging etc.  However, the one that did make an IPO goes down to a more basic level of the web,  hosting.  Rackspace, a Texas-based web hosting and storage company have announced their IPO.  

Rackspace was trying to raise $276 million to upgrade their infrastructure but settled at $187.5 million instead.  Rackspace enters the trading floor with 15 million shares  at $12.50 a pop.  These numbers are dangerously far from the valuations the company had, $1.45 billion. 

The company will trade at the  New York Stock Exchange (NYSE) with the moniker RAX.  Goldman Sachs, Credit Suisse and Merrill Lynch are joint bookrunners on this deal. The deal should come as a big win for local VC heavyweights Norwest Venture Partners and Sequoia Capital, too — they own 16.2 percent and 11.6 percent of RackSpace respectively.

Come to think of it, a hosting company may be a smart product to put up on the market.  Cloud computing is on a steady rise these days and lots and lots of companies are predicting and preparing for its being the "inevitable" future of the web.