Bulls In Rackspace Cheer As IBM Takeover Chatter Remains, Analysts Quiet On Rumor
Shares of Rackspace (NYSE: RAX) are continuing higher during Tuesday's afternoon session, now up about 4 percent from the lows set on Monday. It appears investors in the name are continuing to digest renewed takeover speculation IBM could be kicking the tires on Rackspace.
The rumor is not something new for investors in Rackspace. A quick Google search will reveal such a rumor going back to 2011. Nonetheless, investors are optimistic about the potential for a deal; just Friday, shares of Rackspace were up nearly 2.5 percent as this IBM for Rackspace rumor made its way back onto trading floors around Wall Street.
Reaching out to analysts for comment, the Benzinga newsdesk found a mixed sell-side response. One analyst recognized the rumor, but would not comment further. Another analyst suggested the move higher Tuesday was not related to the rumor, but instead was related to a San Antonio Business Journal article highlighting news the company hired a former Microsoft exec as VP of channel partner sales.
This latter scenario seems unlikely as Rackspace publicly-disclosed this information on Monday morning.
With only a few minutes left in Tuesday's trading session, Rackspace shares last traded at $33.74. It should be noted volume appeared to be pent up during the AM session, but has since become more subdued as the price stabilized over the afternoon session.
Latest Ratings for RAX
|May 2016||Raymond James||Downgrades||Strong Buy||Outperform|
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