Shares of cloud computing specialist Rackspace Hosting (NYSE:RAX) fell 17.7% Wednesday after the company announced an end to a "strategic review" that many believed would conclude with Rackspace selling out to CenturyLink (NYSE:CTL) or another bidder. The company also named President Taylor Rhodes as its new CEO.
In the following video, Fool analyst Nathan Hamilton asks Fool contributor Tim Beyers to explain the implications for investors. Are we witnessing a strategy shift? Is it time to sell Rackspace stock?
Tim says that he's holding on to his shares. He also says that nothing has changed with Rackspace's strategy, though he concedes that price competition in cloud hosting from the likes of Amazon.com and Google could make it tough for Rackspace to produce the outsized growth today's investors are looking for.
Why remain bullish amid the sell-off? Click the video to learn the two things Tim heard Rhodes say that gives him confidence, and the one metric that every investor needs to track.
Nathan Hamilton owns shares of Apple and Google (A class). Tim Beyers owns shares of Apple, Google (A and C class), International Business Machines, and Rackspace Hosting. The Motley Fool recommends Amazon.com, Apple, Google (A and C shares), and Rackspace Hosting. The Motley Fool owns shares of Amazon.com, Apple, Google (A and C class), International Business Machines, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Please note the included video refers to share price movements that occurred on 9/17/14.
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