Rackspace replaces CEO, no longer looking for M&A opportunities

Shares fall by 16%

Managed cloud company Rackspace has announced earlier today that it has ended its "evaluation of M&A transactions", in other words, it was no longer looking to sell itself formally.

The company started a process back in May 2014 after it was approached by a number of undisclosed parties looking to "explore" strategic relationships that ranged from partnerships to outright acquisitions.

Rackspace, which boosts a whopping 200,000 customers globally and is known for its "fanatical support" slogan, saw its shares fall down by more than 16% following that announcement to $33 (about £20, AU$36), valuing the company at $4.63 billion (about £2.84 billion, AU$5.11 billion).

Watershed moment?

Following the announcement, the company's current CEO, co-founder and chairman of the board, Graham Weston, stepped down and has been replaced by Taylor Rhodes.

In a press release, the company stressed the fact that the decision was motivated by its "reaccelerated revenue growth" and its "potential trajectory" for the coming financial year.

It revealed that its revenue grew by 4.3% with the multi-tenant public cloud segment gaining 7.5% sequentially. Operating margins though for the last quarter were down significantly (more than 11%) compared to FY2013.