Why Cincinnati Bell Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cincinnati Bell (NYSE: CBB  ) plunged today by as much as 10% after subsidiary CyrusOne commenced its IPO.

So what: The expected price range for the offering is $16 to $18, and the company is selling 16.5 million shares. If underwriters exercise their options, CyrusOne could raise upwards of $341 million. CyrusOne is looking to be listed on the Nasdaq under the symbol "CONE."

Now what: The subsidiary contributes nearly 15% of Cincinnati Bell's revenue, and after the deal's completion Cincinnati Bell estimates it will still have approximately a 72% stake in CyrusOne. CyrusOne had said it wants to structure itself as a real estate investment trust. The pricing range is on the conservative side of what investors were expecting, which may be contributing to the drop.

Interested in more info on Cincinnati Bell? Add it to your watchlist by clicking here.


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