Why Digital Realty Stock Is Falling as Much as 10% This Week
Shares of giant data-center real estate investment trust (REIT) Digital Realty Trust (NYSE: DLR) have fallen as much as 10.9% this week, according to data from S&P Global Market Intelligence. By the start of trading on Friday, the stock had pared that loss to roughly 9%. The big news driving this decline came out on the first trading day of the new year.
After the close of trading on Jan. 3, Digital Realty announced that it had agreed to acquire a 55% stake in Teraco, valuing that company at $3.5 billion. The owners of the remaining 45% of the company will have the right to put their ownership interest to Digital Realty between 3 1/2 years and 5 1/2 years following the closing, with Digital Realty having the right to call that interest between 5 1/2 years and 6 1/2 years after the close of the deal. Teraco owns data centers in Africa, with the purchase instantly vaulting Digital Realty into the top echelon of such providers on that continent, according to the REIT.
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Source Fool.com
