GDS Holdings Limited (NASDAQ:GDS) stock fell in the premarket session on Tuesday.
The company disclosed a major equity transaction linked to DayOne Data Centers Limited.
GDS agreed to sell DayOne ordinary shares back to DayOne for $385 million.
DayOne is a Singapore-headquartered hyperscale data center platform in which GDS owns a minority stake.
Pricing Match
The buyback price per share matches DayOne's recent Series C convertible preferred share issue price.
DayOne said its new convertible preferred financing exceeded $2 billion.
The share repurchase allows GDS to recover nearly 95% of its invested capital at about a 6.5-times return.
After the transaction, the implied worth of GDS's remaining DayOne stake exceeds $2.2 billion.
That value equals about $11.18 per GDS American Depositary Share.
Strategic Plans
GDS plans to redeploy the repurchase proceeds into new projects within its core China operations.
The company said it aims to generate strong returns as it expands its data center platform.
GDS builds and operates high-performance data centers across China's major technology hubs.
On November 19, GDS reiterated fiscal 2025 total revenues of 11.29 billion yuan–11.59 billion yuan, adjusted EBITDA of 5.19 billion yuan–5.39 billion yuan, and capital expenditure of 2.7 billion yuan.
GDS Price Action: GDS Holdings shares were down 3.18% at $42.60 during premarket trading on Tuesday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
