Rackspace (RAX) agreed to be purchased by private equity firm Apollo Global Management for $32 per share. Rackspace shareholders will receive $32 cash for each share held, and the company will become privately-held. The deal is expected to close before the end of 2016. I advise selling your RAX shares now, rather than waiting several months to gain another $0.53 profit.
Rackspace was initially recommended using my Low PEG Ratio Analysis in the December 2014 Enterprising Model at a purchase price of 25.51. Shares have since gained 23.4% compared to a gain of 7.8% for the Standard & Poor’s 500 Index during the same time period. SELL.
J. Royden Ward, Cabot Benjamin Graham Value Investor, www.cabot.net, 978-745-5532, September 2, 2016