Rackspace Technology Investors Face September 28 Deadline in Securities Fraud Class Action
Kaplan Fox & Kilsheimer LLP has issued a reminder to investors in Rackspace Technology, Inc. (NASDAQ: RXT) about an upcoming September 28, 2026 deadline for those wishing to serve as lead plaintiff in a securities fraud class action lawsuit.
The lawsuit, filed in the United States District Court for the Southern District of New York and captioned Morgan-Reed v. Rackspace Technology, Inc., No. 1:26-cv-06491 (S.D.N.Y.), targets investors who purchased or acquired Rackspace securities between May 7, 2026 and July 8, 2026.
Allegations Against Rackspace
According to the complaint, Rackspace and certain of its officers made false and misleading statements during the class period. The lawsuit alleges that defendants failed to disclose that the company's enterprise AI efforts would require significant reallocation of capacity and capital away from the profitable Private Cloud segment. The complaint also claims that Rackspace concealed declining Public Cloud revenue as customers began contracting directly with hyperscale cloud platforms, and that the company planned to significantly reduce its Public Cloud infrastructure resale business.
Rackspace operates through two reportable segments: Public Cloud, which provides managed services on AWS, Microsoft Azure and Google Cloud platforms, and Private Cloud, which provides managed services for customer environments in Rackspace data centers or customer-owned facilities. Public Cloud generated approximately 63% of Rackspace's total revenue in 2025, representing roughly $1,696 million of $2,685.7 million in total revenue.
Stock Price Impact
On July 9, 2026, Rackspace disclosed a $150 million reduction to its full-year 2026 revenue guidance. The company's stock fell 33.6% that day, dropping $2.21 to close at $4.37 per share. Full-year 2026 Public Cloud revenue guidance was cut by $125 million, from a range of $1.575-$1.625 billion down to $1.450-$1.500 billion.
Lead Plaintiff Deadline and Process
Under federal securities class action law, applications for lead plaintiff must be filed within 60 days following the first filing of a class action complaint, a deadline that is strictly applied. The September 28, 2026 deadline represents this 60-day window.
The lead plaintiff in a securities class action is typically the investor with the largest financial interest in the relief sought who is adequate and typical of class members, and serves to direct and oversee the litigation on behalf of the class. However, investors who purchased shares during the class period and sustained losses are automatically part of the class action; the 60-day deadline applies only to those seeking to serve as lead plaintiff.
About Kaplan Fox
Kaplan Fox & Kilsheimer LLP, founded in 1956, is a nationally recognized law firm focused on complex litigation. The firm has recovered more than $10 billion for clients and the classes it has represented over more than 50 years of prosecuting securities, antitrust, and consumer protection actions in federal and state courts nationwide.
Investors with questions about the case or their rights may contact the firm at (646) 315-9003 or [email protected]. Contacting the firm does not create an attorney-client relationship.
