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Dharmendra Kumar Sinha, Executive Vice President and President of Public Cloud at Rackspace Technology, Inc. (NASDAQ:RXT), has recently sold a significant portion of the company’s stock. According to a filing with the Securities and Exchange Commission, Sinha sold 176,374 shares of Rackspace common stock. The sale comes at a time when InvestingPro data shows the company facing significant financial challenges, with a weak overall financial health score and substantial debt burden. The transactions were carried out between March 17 and March 19, 2025, at prices ranging from $1.75 to $2.13 per share, resulting in a total sale value of $329,819. The stock, currently trading at $1.87, has experienced significant volatility, dropping over 10% in the past week alone.
This transaction was part of a "sell to cover" strategy, aimed at fulfilling tax withholding obligations related to the vesting of restricted stock units previously granted to Sinha. The sales were executed under a Rule 10b5-1 trading plan, which was established on September 14, 2023, to automate the sale of shares necessary to cover such tax obligations.
Following these transactions, Sinha retains ownership of 2,117,455 shares of Rackspace common stock.
In other recent news, Rackspace Technology reported fourth-quarter results that surpassed analyst expectations, with adjusted earnings per share of -$0.02, beating the forecast of -$0.04. The company’s revenue reached $685.6 million, exceeding the consensus estimate of $674.98 million, though it marked a 5% decline from the previous year. Despite this, Rackspace’s full-year 2024 revenue saw a 7% decrease, totaling $2.74 billion. The company noted a decline in its private cloud and public cloud revenues, which fell 6% and 4% year-over-year, respectively. Looking ahead, Rackspace’s first-quarter 2025 guidance aligns with analyst expectations, projecting revenue between $653 million and $665 million and adjusted EPS between -$0.07 and -$0.09. CEO Amar Maletira highlighted record-breaking quarterly sales bookings, although market participants seemed to focus on the continued revenue declines. Additionally, the company reported cash and cash equivalents of $144 million at the end of 2024, with no outstanding balance on its $375 million revolving credit facility. Despite the earnings beat, the company’s shares fell, indicating that investors were looking for stronger growth signals.
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