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Amazon Eyeing Stake In Rackspace Technology

August 17, 2020 at 07:00PM

Shares of Rackspace Technology Inc. (Nasdaq: RXT) were up almost 12 percent as of 11:56 a.m. EST Monday (Aug. 17) following a Reuters report indicating that Amazon (Nasdaq: AMAZ) may buy a stake in the company.

Rackspace sells customers access to its own cloud and also offers a service called RackConnect, which helps customers access clouds maintained by Amazon Web Services (AWS), Microsoft Azure, VMWare and Google Cloud.

Reuters reported that Amazon is considering buying a minority stake in Rackspace, but there is “no certainty” that a deal would be reached. Rackspace’s majority owner is Apollo Global Management Inc.

Rackspace and Apollo declined to comment, and Amazon did not respond to a request for comment.

In an SEC filing connected with its initial public offering (IPO) earlier this month, Rackspace listed net income of $102 million and revenue of $2.4 billion for the fiscal year that ended Dec. 31, 2019.

FinTech companies’ growing interest is one of many factors driving demand for cloud computing, which is attracting new players such as Wasabi.

Cloud computing also has benefited significantly from the surge in employees working from home due to COVID-19.

Rackspace was founded in 1998 by three students from Trinity University and maintains its headquarters there. It claims to have 6,000 employees and customers in 120 countries.

Chief Executive Officer Kevin M. Jones joined Rackspace in April 2019, according to his official company biography.

In other Amazon news, it was reported on Monday (Aug. 17) that Amazon is being investigated by Germany’s competition regulator for potential antitrust issues stemming from its relationship with third-party sellers.

Amazon Eyeing Stake In Rackspace Technology …

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