Big day for one of my stocks and I am happy for many of my friends over at Rackspace $RAX.

The Company is doing all the right things in the right space at the right time.

The shortsellers seem (to me) TO BE MISSING THE STORY.

I remember talking with Herb Greenberg a few years back abou the stock when it was a ‘roll up’ of managed hosting services. We were on a 3 hour falafel run in Southern California. I agreed that all roll ups go bad, but I was long and said good luck guessing. The stock was in the low 20’s.

I also remember the $RAX announcement about 18 months ago when they decided to open the stack and change the model in a way that could sacrifice the bread and butter toll up.

The market is bidding up this smaller part of the business and the ‘roll up’ has continued longer than any short seller can public. My smart friend Herb was out mentioning the same old problem yesterday on the streams.

He’s just wrong this time. The market is looking ahead at the opportunity of the non managed housed business. the stock is over $50 and steamrolling.

Even if that business dies extremely slow, the stock will be measured going forward by how their ‘open’ cloud businesses are growing.

Trends end, but this cloud Company is pushing all the right storm buttons for shortsellers.

Disclosure – Long $RAX