Rackspace IPO's lesson? Rackspace shouldn't have gone public
One's tempted to praise Rackspace, the San Antonio-based Web-hosting provider, for having the bravery to try an IPO at a time when most tech companies are doing everything they can to avoid the public markets. But with its stock closing the day at $10.01, almost 20 percent below the offering price, Rackspace's IPO was a crashing disappointment. As has the service to its customers. Rackspace once promised "fanatical" customer service. But the company's management seem most fanatical about taking care of themselves.Last November, one of its datacenters was brought low, embarrassingly, by a truck crashing into a nearby power transformer. That's precisely the kind of thing datacenters are designed to survive, but Rackspace's did not. Its employees all got bonuses anyway. That's a fanatical disservice to its investors, who now include public shareholders. A more deserving tech company, one hopes, will come to the public markets soon, and erase the memory of Rackspace's broken offering.