Why Kingsoft Cloud Stock Plunged Today

Shares of Kingsoft Cloud (NASDAQ: KC) have plunged today, down by 11% as of 12:05 p.m. EDT, after the company announced a secondary offering. Kingsoft Cloud separately reported a new strategic partnership.

The Chinese tech company is looking to sell 8 million American depositary shares (ADSs), while several executives are simultaneously selling another 9.7 million ADSs. Each ADS represents 15 ordinary shares. Underwriters will have an option to purchase up to 2.7 million additional ADSs. The offering has not yet priced, but Kingsoft Cloud estimates that net proceeds will be approximately $298.8 million to $398 million, depending on whether underwriters exercise their option. The company will not receive any proceeds from the ADSs that existing shareholders are selling.

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Source Fool.com