The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the Southern District of New York, captioned Morgan-Reed v. Rackspace Technology, Inc., et al., Case No. 26-cv-06491 , on behalf of persons and entities that purchased or otherwise acquired Rackspace Technology, Inc. (“Rackspace” or the “Company”) (NASDAQ: RXT) securities between May 7, 2026 and July 8, 2026, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Investors are hereby notified that they have until 60 days from this notice to move the Court to serve as lead plaintiff in this action.
IF YOU SUFFERED A LOSS ON YOUR RACKSPACE TECHNOLOGY, INC. (RXT) INVESTMENTS, CLICK HERE TO SUBMIT A CLAIM TO POTENTIALLY RECOVER YOUR LOSSES IN THE ONGOING SECURITIES FRAUD LAWSUIT.
What Happened?
On July 9, 2026, Rackspace released preliminary second quarter 2026 financial results and lowered its 2026 outlook “[t]o account for [its] transition away from certain low-margin engagements that will be redeployed to [its] enterprise AI business.” The Company now estimates revenue midpoint at $2.5B (versus prior midpoint at $2.65B) and EBITDA midpoint at $290M (versus prior midpoint at $310M).
On this news, Rackspace’s stock price fell $2.21, or 33.6%, to close at $4.37 per share on July 9, 2026, thereby injuring investors.
What Is The Lawsuit About?
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company’s enterprise AI efforts would require Rackspace to significantly re-prioritize its capacity and capital away from the profitable Private Cloud segment; (2) that Rackspace’s Public Cloud revenue was declining as customers contracted directly with hyperscale cloud platforms; (3) that, as a result, Rackspace was likely to significantly reduce a material portion of its Public Cloud infrastructure resale business; (4) as a result, the Company’s fiscal year 2026 revenue would be significantly impacted; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Contact Us To Participate or Learn More:
If you purchased Rackspace securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please click HERE or contact us at:
Law Offices of Frank R. Cruz
2121 Avenue of the Stars, Suite 800
Telephone: 310-914-5007
Email: info@frankcruzlaw.com
Visit our website at: www.frankcruzlaw.com
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View source version on businesswire.com: https://www.businesswire.com/news/home/20260729065536/en/
Law Offices of Frank R. Cruz
2121 Avenue of the Stars, Suite 800
Telephone: 310-914-5007
Email: info@frankcruzlaw.com
Visit our website at: www.frankcruzlaw.com
