Street Calls of the Week
Investing.com -- Kingsoft Cloud Holdings Limited (NASDAQ:KC) stock fell 3.9% Tuesday after the Chinese cloud service provider announced the pricing of an upsized HK$2.802 billion (approximately $359 million) share offering.
The company priced 338 million ordinary shares at HK$8.29 per share in a placement to non-U.S. persons in offshore transactions. The offering, which relies on Regulation S under the Securities Act of 1933, is expected to close on or before October 2, 2025, subject to customary closing conditions.
Morgan Stanley Asia Limited is serving as the placing agent for the transaction. Kingsoft Cloud plans to allocate the proceeds strategically, with 80% dedicated to supporting its artificial intelligence business, including expanding infrastructure and enhancing cloud service capabilities. The remaining 20% will be used to replenish working capital and for other corporate purposes.
The company stated that it intends to utilize the net proceeds from the placement by December 31, 2028. Kingsoft Cloud is positioning itself to strengthen its foothold in China’s competitive cloud services market, with a particular focus on developing its AI capabilities.
Kingsoft Cloud, which trades on both the NASDAQ and Hong Kong Stock Exchange (HKEX:3896), has seen its shares react negatively to the dilutive effect of the new share issuance, despite the company’s plans to invest in growth opportunities.
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