Why Rackspace Hosting (RAX) Stock Is Advancing Today

NEW YORK (TheStreet) -- Shares of Rackspace Hosting, Inc.  (RAX) are higher by 6.67% to $36.00 after it was reported that the cloud service provider is considering taking itself private and is in talks with a private equity firm to fund the deal, according to technology blog TechCrunch sources, Reuters reports.

Rackspace, which put itself up for sale earlier this year, may make an announcement by the end of this week, TechCrunch said

As of Tuesday's closing, the company was valued at about $4.8 billion.

Rackspace has reportedly received at least three acquisition bids, including from Hewlett-Packard (HPQ) and IBM (IBM).

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TheStreet Ratings team rates RACKSPACE HOSTING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate RACKSPACE HOSTING INC (RAX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

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