NEW YORK (TheStreet) -- Shares of Rackspace Hosting (RAX) plummeted 16.09% to $33.01 in after-hours trading Tuesday after the company announced it had ended its formal evaluation of strategic alternatives that would lead to another company acquiring Rackspace.
The managed cloud computing company "declared its commitment to remain independent" via a press release after the market closed. Rackspace also announced president Taylor Rhodes as CEO "to lead and drive its managed cloud strategy."
Rackspace disclosed in a regulatory filing on May 15 that several parties approached the company about partnership or acquisition possibilities.
Must Read: Warren Buffett's 25 Favorite Stocks
"We ran a thorough process under the direction of our board of directors, independent advisors, and a Strategic Transaction Committee of the Board," said Graham Weston, Rackspace co-founder and chairman. "In this process we talked to a diverse group of interested parties and entertained different proposals.
"None of these proposals were deemed to have as much value as the expected value of our standalone plan. We concluded that the company is best positioned to drive value for shareholders, customers and Rackers through the continued execution of its strategic plan to capitalize on the growing market opportunity for managed cloud services."
"The board also considered a share repurchase program and determined that, based on the company's significant opportunities, it is prudent to maintain flexibility at this time to ensure that the appropriate investments can be made to drive our strategy forward. We will continue to evaluate the benefits of implementing a buyback program in the future."