Rackspace (RXT) Stock Falls Following ‘Security Incident’
Some of Microsoft’s (NASDAQ:MSFT) email users are probably not too pleased with what’s happened this past weekend. On Dec. 2, Rackspace Technology (NASDAQ:RXT) identified an issue affecting the company’s Hosted Exchange environments. This appears to have caused problems for a number of Microsoft 365 users. Today, RXT stock traders are reacting by dumping their shares.
Rackspace Technology is a cloud-computing services provider that’s based in Texas. Working with Microsoft is among Rackspace’s primary bragging points, but there’s no room to boast when security-related issues arise.
In the early-morning hours of Dec. 2, Rackspace said it was “investigating reports of connectivity issues to [its] Exchange environments.” Consequently, it noted “users may experience an error upon accessing the Outlook Web App (Webmail) and syncing their email client(s).”
It wasn’t until very early on Dec. 3 that Rackspace actually called it a “security incident.” Of course, that’s a frightening phrase, and it’s understandable if some of Microsoft’s webmail users weren’t happy.
RXT Stock Gets Punished for the Security ‘Issue’
By the afternoon of Dec. 3, Rackspace had reportedly “assisted numerous customers to open replacement Microsoft 365 accounts so they can resume sending and receiving emails.” One could imagine, though, this would have been an inconvenient process for these webmail users.
Very early this morning, Rackspace claimed to have “successfully restored email services to thousands of customers on Microsoft 365.” The company also said it was continuing to “make progress on restoring email service to every affected customer.”
This, however, was too little and too late for some RXT stock traders. Today, the Rackspace Technology share price slid more than 9%, falling far below the crucial $5 level.
The stock had already lost significant value throughout 2022. Today’s update on Rackspace working to resolve the webmail security issue did little to quell investors’ concerns.
It’s possible a future update will offer a full resolution and a more complete explanation of how this issue occurred. Until then, however, a sense of anxiety and frustration is apparently causing many financial traders to lose faith in RXT stock.
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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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