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HomeMarketRackspace Stock Drops as 'Security Incident' Takes Some Clients' Email Offline

Rackspace Stock Drops as ‘Security Incident’ Takes Some Clients’ Email Offline

Rackspace said Friday it could take several days to fix its security problem.

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shares are down sharply Monday amid a major service outage that is preventing thousands of the company’s customers from sending or receiving email.

The outage involves the tech infrastructure company’s
Exchange hosting business, which provides customers with Microsoft email, calendar, and contact software. On Friday, Rackspace posted a notice on its status page saying that due to a “security incident” it had “powered down and disconnected” its Exchange service.

Rackspace stock (ticker: RTX) was down 11% to $4.32 in early afternoon.

Its Friday post said a fix could take several days. The company encouraged customers to switch to Microsoft 365, a cloud-based version of the software giant’s communications suite.

The company noted that to make the switch, customers would need to manually set up accounts for each individual user. Rackspace said that it was reaching out to all affected customers to help them work through the changeover. Twitter is littered with complaints from Rackspace customers who are struggling to get support from the company to make the switch.

In an update to the status page on Monday, Rackspace said it has restored email for “thousands of customers,” and that it is making progress for restoring email for the rest, while continuing to advise customers to switch to Microsoft 365.

Asked about the incident, a spokesperson for Rackspace pointed to the company’s status page.

Rackspace hasn’t clarified the nature of the security issue and hasn’t addressed whether any data was stolen or destroyed. The company also hasn’t offered any information on the identity of whatever party may have caused the issue, or any detail on the potential financial impact of the lengthy outage.

Write to Eric J. Savitz at


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