Hanging RACK Out To Dry

Shares of Rackable Systems (RACK) have been knocked more than $5 off their intraday high today. The stock looked like it was staging a successful breakout until rumors started swirling about a Gartner report that showed RACK server shipments below expectations.

I checked around, and came away with comments that Gartner put out preliminary market share estimates, showing RACK declined sequentially. But RACK does not give this information to Gartner, and said they went through the same thing last quarter.

RACK is in its blackout period. For them to break their normal silence to comment on these rumors implies how much they disagree with the figures.

RACK reports earnings after the close on Thursday, and I'm sure we will get some clarity on the conference call.

net long RACK