Monday May 19, 2014
RAX Should not be left off the Rack.
What happens to a valuable company with an innovative business plan whose stock falls 60% in over a year?
You become a take over target, that's what. Rackspace has gotten a lot of big companies interested in its cloud computing model. The fastest way to get a leg up in that market is to
simply buy RAX. With the price depressed and its customer base still in tact, RAX is now, as the saying goes, in play. That was the reason for the big jump in price at the end of the week.
THis is a great lesson in just how Wall Street works. And with 5700 employees, what happens will be important for San Antonio.
RAX has stood pretty much alone in creating a Silicon Valley easy does it relaxed environment from a former shopping mall. Would a new buyer leave the comnpany here or try to move some or all of it elsewhere? Certainly the cost of operating in SA is way cheaper than California.
The founder still owns 13% of the stock so let's put this one on our watch.
Professor Elam 
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