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New Federal Securities Cases

Rackspace Hosting, Inc.

A class action lawsuit has been filed in the United States District Court for the Southern District of New York against Rackspace Hosting, Inc. ("Rackspace" or the "Company") (NYSE:RAX), on behalf of investors who purchased or otherwise acquired Rackspace securities during the period from November 11, 2014 through August 10, 2015 (the "Class Period"). The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and U.S. Securities and Exchange Commission ("SEC") Rule 10b-5 promulgated thereunder.

The lawsuit alleges that during the Class Period, Defendants violated provisions of the Exchange Act by issuing false and misleading statements regarding the impending loss of its contract with Vodafone Group Plc ("Vodafone") and the attendant impact on the Company's profitability and growth prospects.

During the Class Period, Rackspace repeatedly touted the profitability and growth of its international business. However, Defendants' Class Period statements pertaining to the Company's profitability and growth prospects were materially false and misleading because Defendants failed to disclose that: (1) Vodafone had initiated extensive data migration away from Rackspace servers, signaling Vodafone's intent to replace Rackspace with alternative providers on the contract's April 1, 2015 expiration date; and (2) the failure to secure a renewal of the Vodafone Contract would have a significant near-term financial impact on the Company's 2015 recurring revenues.

Beginning in May 2015, a series of disclosures exposed the non-renewal of the Vodafone Contract and its concomitant impact on the Company's financial performance and business prospects. In reaction to these revelations, the Company's stock price fell from $56 per share to $29.24 per share.

If you acquired Rackspace securities during the Class Period, you may, no later than July 10, 2017, request that the court appoint you lead plaintiff of the proposed class. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions that could affect the overall recovery for class members, including decisions concerning settlement.

If you are a current or former Rackspace shareholder and wish to obtain additional information, please fill out the contact form at the link below.


Investigation Contact Form

Rackspace Hosting, Inc. Contact Form



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