Cloud technology company Rackspace went public for the second time on Tuesday after four years in the private market following a leveraged buyout from Apollo Global Management Inc.
During that time, the company refined its focus and went from a competitor to a tight-knit partner with large-scale cloud service providers.
"One thing that's changed pretty significantly is that prior to the take-private in 2016, Rackspace Technology was competing with AWS, Google, and Microsoft," CEO Kevin Jones told Cheddar. "Today we don't compete."
The company is now focused on designing and operating software that helps clients manage
multiple cloud computing services.
Jones said coronavirus has given the company a boost as clients seek to cut costs or pivot to new business models by embracing cloud technology.
"We had a lot of momentum before, but this has really just put us into hyper-growth mode," he said.
Yet the new model didn't spare Rackspace from a tough public debut. Shares fell 20 percent at the opening bell on Wednesday, and the offering was already priced at the bottom end of its range.
Jones, however, maintains the company is still in a stronger position than ever.
"We've seen tremendous growth in the business," Jones said. "We've achieved four record-breaking sales quarters in a row. The company has 95 percent recurring revenue, we're extremely profitable, great cash flow. With this profile, we decided to come back into the public markets."
This isn't the first time Rackspace has gone public during an economic crisis. Its first IPO was in 2008 in the heat of the Great Recession.