The first US tech flotation for six months has fallen well short of expectations.

Web hosting giant Rackspace has become the first IT outfit to go public since security vendor ArcSight in February. If successful, the vendor’s initial public offering (IPO) could have signalled the end to a baron period for tech listings in the US.

However, things went from bad to worse as Rackspace’s shares plunged from an underwhelming starting price of $12.50 on the New York Stock Exchange to $10.00.
It was hoped the shares may price at up to $16.

Rackspace’s disappointing debut is unlikely to encourage other privately-held outfits to make the plunge following a prolonged dry period for tech flotations.

According to Dealogic, only three other US technology outfits have attempted to go public since the economy took a nose dive.