Cannell Capital tells Rackspace to sell equity to ease debt

Cannell Capital disclosed a letter sent to Rackspace’s (RXT) board, which states in part: “Accounts under the purview of Cannell Capital LLC have acquired sundry debt securities of Rackspace Technology, Inc. We are delighted with 1) The general progress that RXT has made; 2) The specific and recent Palantir win; and 3) RXT’s enviable position in the hybrid cloud managed services space. We are not delighted with 1) The long slog we have endured to talk to management; 2) The looming tsunami of debt; and 3) As far as we can see, apathy and / or ignorance toward said tsunami. Where is the plan to recapitalize the company? Is there a plan? Accordingly, I or a colleague hereby register our interest in serving on the inevitable creditor committee…The prudent thing would be to sell equity into this to ameliorate some of the debt. We believe that RXT has neither an at-the-market offering in place nor a plan to issue equity.”