Rackspace Technology’s initial public offering got off to a rocky start in its Nasdaq debut on Wednesday as the San Antonio-based cloud services company saw its stock plunge almost 20 percent before opening.
Shares opened at $16.85, according to Reuters – 19.8 percent lower than the $21-per-share pricing Rackspace had announced Tuesday. Shares reached a low of $15.89 just minutes before the closing bell Wednesday. Its stock peaked at $17.39 earlier in the day.
Rackspace, owned by Apollo Global Management, still managed to raise just over $700 million, with Rackspace CEO Kevin Jones telling Fortune he still felt positive about the company’s public debut, which Jones called, “one of the largest tech IPOs of the year.”
The company sold 33.5 million shares at the bottom end of its target range of $21 to $24 per share and is valued at $4.18 billion, excluding debt. Jones told Fortune part of the $700 million raised in its IPO will go toward paying off the company’s $3.9 billion debt.
Still, Rackspace’s shares did not follow trends other cloud computing companies saw Wednesday, as the coronavirus pandemic continues to push more businesses to rely on cloud computing for their remote workflow.
Overall, Nasdaq and cloud computing technology stocks have seen record gains this week. The Nasdaq composite, an index of all the stocks on the Nasdaq, was up 0.52 percent by the end of the day, whereas Rackspace’s competitors Accenture, Atos, and DXC Technology all saw gains Wednesday as well.
In its previous IPO in 2008, Rackspace raised $187.5 million after opening at $12.50 a share.
Rackspace officials did not immediately return a request for comment.