Graham Weston, founder and chairman or Rackspace (NYSE: RAX), purchased $2.5 million of company stock and filed a 10b5-1 plant to buy up to $2.5 million more. The number one managed cloud company stock purchases are said to be part of Weston’s individual investment strategy.
On November 18, Weston purchased the first $2.5 million on the open market, which was selling for an average of $42.752 per share for 58,480 shares. In a statement, Weston said the purchase was to show that he believed in the future of Rackspace and that for businesses needing assistance with managing cloud, the company can become a trusted partner.
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One of several reasons that Weston believes Rackspace has demonstrated strong traction is the leadership of Taylor Rhodes, the company’s new CEO. When it comes to providing customers with Fanatical Support, Rhodes is 100% committed.
In accordance with Rule 10b5-1 of the amended 1934 Securities Exchange Act, Weston entered into a written plan for stock trading. However, the purchase of stocks was also compliant with the insider-trading policy of Rackspace.
Prior to the purchase in November, Weston held 13.2% of the company’s outstanding common stock. According to the trading plan, purchases can take place on the first day of the next open trading window, which is scheduled for some time in early to mid-February of next year.
As outlined in Rule 10b5-1, written and prearranged stock trading plans conducted by insiders when not in possess of non-public information material is allowed to be implemented. This rule also states that trading by insiders is permitted according to trading plans, whether subsequent non-public information material is received or not.
Pursuant to his plan to the Securities and Exchange Commission, which is required under Rule 16(b) of the Exchange Act, Weston will report the transactions. However, unless required under the law, trading plans, additional activities, and similar plans of officers and directors of Rackspace, will not report Rule 10b5-1.
Currently, Rackspace is ranked as the number one managed-cloud company that allows companies to tap into cloud’s power but without needing to hire complex technologies, thanks to Rackspace’s Fanatical Support and unrivaled technical expertise.