Kingsoft Cloud Holdings Ltd (KC) saw its stock price plummet 14.85% in pre-market trading on Wednesday, following the announcement of a significant public offering. The Chinese cloud service provider revealed plans to sell 18.5 million American depositary shares (ADS), each representing 15 ordinary shares, in an underwritten public offering.

The company priced its offering at $11.27 per ADS, or HK$5.83 per ordinary share, based on an exchange rate of HK$7.7574 to US$1.00. This move is expected to raise approximately $260.7 million in gross proceeds, which Kingsoft Cloud plans to use for upgrading infrastructure, technology development, and general corporate purposes. Additionally, the company has granted underwriters a 30-day option to purchase up to an additional 2,775,000 ADSs.

The sharp decline in Kingsoft Cloud's stock price can be attributed to investors' concerns over potential dilution of existing shareholders' stakes. Moreover, the broader technology sector was also under pressure on Wednesday, with the Technology Select Sector SPDR Fund (XLK) down 2.3% in pre-market trading. This general downturn in tech stocks, coupled with the news of the public offering, likely contributed to the significant drop in Kingsoft Cloud's share price.