U.S.-listed shares of VNET Group (NASDAQ:VNET), a Beijing-based data center operator, fell 7% to $10.23 in early Thursday trading after the company announced a larger-than-expected capital raise.
VNET priced a $430 million offering of 5-year, 2.5% convertible bonds, up from an initially planned $400 million.
The bonds carry an initial conversion price of $13.75 per American depositary share (ADS), reflecting a 25% premium to the stock’s last closing price.
VNET intends to use the net proceeds to fund wholesale internet data center projects, bolster working capital, and support general corporate purposes.
The offering was led by Goldman Sachs as the sole bookrunner.
The company, which operates with approximately 263.2 million shares outstanding and a market capitalization of $2.9 billion as of Wednesday’s close, has seen significant share price growth over the past year.
VNET shares ended 2024 at $4.74, up sharply from $1.95 a year ago, driven by rising demand for data center services and strategic investments.