The stock price of Rackspace Hosting, Inc. (NYSE:RAX) plummeted nearly 17% to $32.71 per share during the extended hours trading on Tuesday.

Rackspace Hosting

The decline was due to the company’s announcement that it ended its evaluation on M&A transactions, and expressed its commitment to remain independent.

Rackspace chairman says none of the proposals has much value

In a statement, Graham Weston, co-founder and chairman of Rackspace Hosting, Inc. (NYSE:RAX) said the board of directors, together with independent advisors and a strategic transaction committee evaluated proposals from interested parties.

“In this process we talked to a diverse group of interested parties and entertained different proposals. None of these proposals was deemed to have as much value as the expected value of our standalone plan,” said Weston.

According to him, they concluded that Rackspace Hosting, Inc. (NYSE:RAX) is best-positioned to drive value for shareholders and customers through the continued execution of its strategic plan to capitalize on the growing market opportunity for managed cloud services.

Rackspace board considered shares buyback program

Weston also stated that the board of directors of Rackspace Hosting, Inc. (NYSE:RAX) considered a share buyback program based on its significant opportunities. The board determined that it was to maintain the company’s flexibility at this time to ensure that appropriate investments can be made to drive its strategy going forward.

“We will continue to evaluate the benefits of implementing a buyback program in the future,” said Weston.

Board appoints Taylor Rhodes as CEO

The board of directors of Rackspace Hosting, Inc. (NYSE:RAX) appointed Taylor Rhodes as CEO effective immediately. He will take over the role from Weston, who will remain as non-executive chairman of the board.

According to Weston, Taylor brings significant experience, dedication and passion to his role as CEO. Rhodes was instrumental in the development and execution of the managed cloud strategy of Rackspace Hosting, Inc. (NYSE:RAX), which is currently delivering strong results.

“Our underlying strength, as evidenced by our strong second quarter results and the recent traction with customers and industry experts, gives us great confidence in the future,” said Taylor.

He added, “In fact, we remain on track to have a strong third quarter and second half of the year and are comfortable with the guidance ranges we have provided. We are more focused than ever on expanding our leadership of the managed cloud market, and we think the best way to do that is by remaining an independent company.”