Rackspace Technology Faces Investigation Over Investor Guidance
Rackspace Technology (NASDAQ: RXT) is under investigation for potentially misleading investors about its financial outlook prior to cutting revenue and earnings guidance significantly on July 9, 2026. The company's stock price fell sharply following the announcement.
Rackspace Technology (NASDAQ: RXT) is facing an investigation by SueWallSt concerning allegations that the company misled investors regarding its fiscal year 2026 financial outlook. The inquiry focuses on statements made before July 9, 2026, when the company drastically reduced its revenue and adjusted EBITDA guidance.
On July 9, 2026, Rackspace Technology announced a reduction of $150 million in its full-year 2026 revenue guidance and $20 million in its adjusted EBITDA guidance. Following this announcement, the company's stock price dropped by more than 25% intraday. This occurred just one day after RBC Capital had raised its price target on Rackspace shares.
The guidance cut was disclosed concurrently with the announcement of a $250 million at-the-market equity program and a partnership with Palantir. The investigation aims to determine whether Rackspace's prior statements about its FY2026 outlook were consistent with the reduced guidance ultimately provided to the market.
SueWallSt, which is operating in conjunction with the law firm Levi & Korsinsky LLP, is encouraging investors who purchased RXT shares and incurred losses to submit their information for a case evaluation. The firm specializes in securities litigation and aims to ascertain the company's liability for any alleged misrepresentations to investors.