Why GDS Holdings Limited (GDS) Went Down On Wednesday

We recently published a list of 10 Stocks Crash Harder Than Wall Street. In this article, we are going to take a look at where GDS Holdings Limited (NASDAQ:GDS) stands against other worst-performing stocks.

GDS Holdings dropped for a second day on Wednesday, losing 8.73 percent to finish at $24.77 apiece as investors soured on an investment firm’s lower price target for the company while digesting its planned $623-million fundraising activity.

On Wednesday, Jefferies markedly lowered its price target for GDS Holdings Limited by 22 percent to $37.32 from $47.76 previously, following its planned fundraising program that is expected to dilute ADS by 5 percent.

However, Jefferies maintained its Buy recommendation on the stock.

A top level executive looking out of a skyscraper window, symbolizing the strategic decisions taken by the company.

In separate statements, GDS Holdings Limited said it was planning to raise a higher amount from the issuance of convertible notes, now at $500 million versus the $450 million previously. The notes carry a 2.32 percent yield and are set to mature in 2032.

Meanwhile, the remaining $123 million is expected to be raised from the issuance of American Depositary Shares (ADS), each representing eight Class A ordinary shares, at a price of $24.50 apiece.

The company said proceeds will be used for general corporate purposes, working capital needs, and the refinancing of its existing indebtedness, including potential future negotiated repurchases or redemption upon exercise of the investor’s put right of its convertible bonds due 2029.

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This article is originally published at Insider Monkey.