Surveying the Damage for Data Center Stocks

As the market plunge continues, shares of data center and managed hosting companies have seen even steeper declines than the Dow and other major averages.

The Dow has now lost 21 percent over the last seven sessions. The relentless decline on Wall Street raises hard questions about the impact of stock prices on real-world business activity. This issue is critical for the data center industry, which has shown resilience amid a difficult economy. But many data center and managed hosting companies have seen even steeper declines than the Dow and other major averages. Here's a chart of the sector's performance for the month of October (thus far):

Managed hosting companies, which rely on high-value contracts with enterprise companies, have been particularly hard-hit. Shares of NaviSite (NAVI), Savvis (SVVS), Terremark (TMRK) and Rackspace (RAX) have all lost between 38 and 48 percent in October. Rackspace is trading at less than half its August IPO price.

We're continuing to discuss market conditions with key players in the industry, and will be writing more about data center demand later today.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish