U.S.-listed shares of Beijing-based cloud service provider Kingsoft Cloud (NASDAQ:KC) experienced a significant drop in early trading on Wednesday, falling 15% to $11.22.
This decline follows the company's announcement of a $208.5 million stock offering.
Kingsoft Cloud sold 18.5 million American depositary shares (ADSs) on Wednesday, priced at $11.27 apiece.
This offering price represented a 14.6% discount compared to the stock's closing price of $13.20 on Tuesday.
In a concurrent move, Kingsoft Corp, an existing shareholder, agreed to purchase approximately 69.4 million Kingsoft Cloud ordinary shares through a private placement.
Kingsoft Cloud intends to utilize the gross proceeds from both the public offering and the private placement, totalling $260.7 million, to upgrade its infrastructure, invest in technology advancements, and for other general corporate purposes.
Prior to today's trading, Kingsoft Cloud's stock had shown strong year-to-date performance, with an increase of 25.8% as of Tuesday's close.