Look at the last 5 or 6 trading range patterns (high/low) for RAX. In general the stock makes a new high and then experiences 5 to 9 days of profit taking back and fill activity. We have now had 6-7 days of this lower highs pattern following the $23 high made 1 1/2 weeks ago. On Thursday the stock was making a move to get down to $20/sh. and then the sellers dried up for the most part with buyers stepping up. This stock was showing relative strength as the market was falling hard late in the trading day the stock was holding very near the $20/sh. mark. My best guess is the stock will start a new leg back up to $23/sh within 1-2 days and then hold for the Q4 report and conf. call. If EQIX has a good qtr. as I expect...Rax will likely hold up near the $23 mark before it reports (assuming they report after EQIX) and wait for conf. call confirmation to validate and become the catalyst for another leg higher. This of course is all just my opinion...but I am a 23 year market veteren/professional. A wise man once told me never to short an accelerating growth story...much less one that is a leader in a two buzz word categories "cloud computing and hosting".
going to be 24.00 this week and more to come rax is the leader in cloud hosting look at their product if you can figure it out. should be trading higher then this a very highly take over target for 2010
The barrier of entry into the hosting / cloud computing industry is very low. It's laughable that RAX has such a lofty multiple (56x 2010 estimates) considering that the hosting industry is extremely competitive.
EQIX is not a good comparison to RAX in my opinion. EQIX is the unquestioned leader in the carrier-neutral datacenter space, has significantly more assets and much higher barriers to entry.
I think it's insane to pay more than 20x earnings for RAX. The huge insider selling and weakness in the stock during the last couple of weeks of 2009 is a red flag that this stock will be sold off hard in early January.
Do you understand 10b5-1 trading plans? Your statement of "huge insider selling" is not entirely correct because their sales are usually one of these planned sales. If you're shorting RAX in 2010, you're not very smart, IMO. Goldman Sachs and several others investment firms apparently are not worried about RAX's PE at this time (conviction buy list from GS)....I tend to go with them rather than you. But, hey...let's see who has the last laugh at the end of the year. You'll be long gone, I'm sure.