Apollo-owned cloud company Rackspace shares slump 20% in Nasdaq debut

Shares of cloud services firm Rackspace Technology Inc plunged nearly 20% after making their Nasdaq debut on Wednesday, after the company owned by Apollo Global Management sold shares to investors in its $703.5 million initial public offering.

The stock opened at $16.85 on Wednesday, compared with its IPO price of $21.00 per share.

Rackspace, which leases server space and helps corporations store and access data in the cloud, sold 33.5 million shares at the bottom end of its target range of $21.00 to $24.00 per share, valuing the company at $4.18 billion, excluding debt.

The IPO bucked the recent trend of strong appetite from investors for cloud computing companies as the novel coronavirus outbreak drives more businesses to operate digitally and rely on cloud computing for more of their workflow.