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Rackspace Prices Its IPO

UPDATE WEDNESDAY AUGUST 14, 2008: It looks like Rackspace (RAX) has settled in and been trading at just above $10.50/share for the last several days.  This looks to represent an Enterprise Value/Annualized Revenues multiple of about 2.9x and a total Enterprise Value of approximately $1.4bn.

Congratulations to to the folks at Rackspace!  Their IPO was priced last night at $12.50 per share.  The company should begin trading sometime this morning under the ticker RAX.  By our calculations the Enterprise Value of the company at $12.50/share is approximately $1.6 billion.  This represents a revenue multiple of 3.4x their annualized Q1 revenues and a P/E of approximately 75x.

Please note - Cheval Capital, Inc. is a stockholder of Rackspace, Inc.

Disclaimer: This post is for general information purposes and is not meant to be taken as financial advice, a recommendation to buy or sell the stocks mentioned above, a comprehensive discussion of valuation or how to do the calculations discussed.  Please be sure to consult your financial advisors when valuing your company, considering the sale of your business or making other financial decisions.