Rackspace went public twice. The first time, in 2008, its shares sold for $12.50 and later climbed to about $80. The second time, in August 2020, the stock fell more than 20 percent on its first day. In between, Apollo had bought the company for $4.3 billion and loaded it with debt. Rackspace's trade had changed too. It once rented out its own servers. By 2020 it also ran customers' computing on the big public clouds.

Three Students in San Antonio

Richard Yoo, Dirk Elmendorf, and Patrick Condon met at Trinity University in San Antonio. They launched Rackspace in October 1998 to host websites on servers they ran for customers. Graham Weston and Morris Miller put in seed money and joined to run the business. The bet was service. Rackspace called it Fanatical Support, and customers paid more to reach a person who would fix their problem.

Debt After the Buyout

Rackspace sold 33.5 million shares at $21 each and began trading on the Nasdaq on August 5, 2020. The offering raised $704 million. The shares closed the first day at $16.17. Part of the money went to pay down the debt from Apollo's 2016 buyout, about $3.9 billion. The stock kept falling. In 2024 Rackspace swapped its debt with lenders and raised $275 million of new money. In mid 2026 its shares traded under $4. It is still public.

Cover: Articles of China on Four Shelves, William Henry Fox Talbot. Art Institute of Chicago, public domain. Chosen for objects lined up on shelves (racks of servers).