Rackspace stock extends declines as company says ransomware incident may lead to lost revenue
Shares of Rackspace Inc. were off 1.6% in Tuesday morning trading to build on sharp declines experienced during Monday's session, in the wake of a security incident that the cloud-computing company disclosed over the weekend. Rackspace offered an update in a Tuesday morning release, announcing that the issue affecting its Hosted Exchange environment came as the result of a ransomware incident. Rackspace said it was proactive after detecting the incident and while the company hasn't seen impacts to its other services, it's put additional security measures in place. Still, the incident "may continue to cause an interruption in its Hosted Exchange business and may result in a loss of revenue for the Hosted Exchange business," per the release. Rackspace generates about $30 million in revenue annually from this part of the business. Additionally, the company disclosed that it might see costs associated with its response to the incident. Shares of Rackspace have lost 70% so far in 2022 as the S&P 500 has fallen 17%.
(END) Dow Jones Newswires
December 06, 2022 11:00 ET (16:00 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.