Why GDS Holdings Limited (GDS) Went Down On Wednesday

We recently published a list of 10 Stocks Crash Harder Than Wall Street. In this article, we are going to take a look at where GDS Holdings Limited (NASDAQ:GDS) stands against other worst-performing stocks.

GDS Holdings dropped for a second day on Wednesday, losing 8.73 percent to finish at $24.77 apiece as investors soured on an investment firm’s lower price target for the company while digesting its planned $623-million fundraising activity.

On Wednesday, Jefferies markedly lowered its price target for GDS Holdings Limited (NASDAQ:GDS) by 22 percent to $37.32 from $47.76 previously, following its planned fundraising program that is expected to dilute ADS by 5 percent.

However, Jefferies maintained its Buy recommendation on the stock.

In separate statements, GDS Holdings Limited (NASDAQ:GDS) said it was planning to raise a higher amount from the issuance of convertible notes, now at $500 million versus the $450 million previously. The notes carry a 2.32 percent yield and are set to mature in 2032.

Meanwhile, the remaining $123 million is expected to be raised from the issuance of American Depositary Shares (ADS), each representing eight Class A ordinary shares, at a price of $24.50 apiece.

The company said proceeds will be used for general corporate purposes, working capital needs, and the refinancing of its existing indebtedness, including potential future negotiated repurchases or redemption upon exercise of the investor’s put right of its convertible bonds due 2029.

Overall, GDS ranks 8th on our list of worst-performing stocks. While we acknowledge the potential of GDS, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GDS and that has 10,000x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.