Shares of Rackspace Technology (RXT) tumbled on Thursday after the cloud solutions company reported preliminary second-quarter results that were below expectations and disclosed plans to raise capital through a stock offering.

At the time of writing, RXT stock was down more than 29% and on track for its biggest one-day percentage decline ever.

RXT’s Preliminary Q2 Results

The company said it expects second-quarter revenue to be between $641 million and $649 million, and adjusted earnings to be a loss of $0.08 to $0.11 per share. That comes well below the consensus estimates of $657.1 million in revenue and a loss per share of $0.05, polled by Fiscal AI.

For the full year, the company lowered its revenue forecast to $2.50 billion to $2.55 billion, from $2.65 billion to $2.70 billion, which is below the $2.65 billion estimate. Moreover, outlook for adjusted earnings before interest, taxes, depreciation, and amortization was lowered to $290 million and $295 million, from $310 million and $315 million, missing the consensus estimate of $311.2 million.

“The combination of our prioritization efforts, industry trends, and current supply constraints results in a reduction of $150 million in our revenue expectations and $20 million in EBITDA,” the company stated.

RXT’s $250M Capital Raise Plan

In an SEC filing, the company said it plans to conduct an at-the-market offering and has hired Goldman Sachs to help it raise up to $250 million. The shares under the offering may be sold from time to time. The number of shares or pricing details was not disclosed.

The stock offering plan comes as Rackspace pivots toward becoming an operator of a full enterprise AI stack amid job cuts to redirect resources and fund deals recently struck with notable companies like AMD, Palantir, Rubrik, and VMware, among others.

What Do Retail Traders Think About RXT

On Stocktwits, retail sentiment about the RXT stock turned ‘bullish’ from ‘bearish’ over the last 24 hours.

One user on the platform saw the pullback in shares as a buying opportunity.

Another user expressed disappointment over the timing of the stock offering news, but viewed the current decline in shares as a much better entry point for the long term.

has risen nearly fivefold in value so far this year and more than tripled over the past 12 months.