SEC S1 Filing:
Rackspace’s Press Release:
Rackspace, Inc. (Rackspace® Hosting) today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) relating to the proposed initial public offering of its common stock. The shares in the offering will be offered by Rackspace Hosting and certain selling stockholders. The number of shares to be offered and the price range for the offering have not been determined.
The Rackspace IPO site:
Rackspace Inc, which delivers Web sites, Web-based IT systems, and computing as a service, on Friday filed to raise up to $400 million in an initial public offering of common stock.
Managed hosting specialist Rackspace, Inc. confirmed late Friday that it has filed forms with the SEC for an initial public offering (IPO). The shares will be sold through a “dutch auction” process similar to that used by Google in its 2004 IPO.
Web hosting provider Rackspace filed for an initial public offering with the SEC last night, as we predicted it would. The company will try to raise $400 million, and it intends to set the IPO price through an auction, much like Google did. The underwriters are Goldman Sachs, Merrill Lynch, Credit Suisse, and WR Hambrecht & Co. (the leading proponent of such IPO pricing). Pricing through an auction is designed to make sure the company raises the most money possible instead of giving up a first-day pop to investors who are allocated shares by the investment banks doing the deal. Shares will still be allocated to such clients, but anyone who bids beforehand in the auction at or above the eventual IPO price will also get shares. All in all, it is a much more efficient way to price an IPO and more companies should do it.
Rackspace had raised more than $30 million over the past decade. It was founded in 1996 by three students at Trinity University: Richard Yoo, Dirk Elmendorf and Patrick Condon. Then, in 1998, Graham Weston and Morris Miller invested seed capital into the company and took over management of the company.