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Why 21Vianet Group Stock Is Spiking Today

By Chris Neiger – Jun 22, 2020 at 2:11PM

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An investment from Blackstone boosted the company's share price.

What happened

Shares of 21Vianet Group, Inc. (VNET -2.85%), a China-based internet data center service provider, were rising today after the company received a $150 million investment from Blackstone (BX). Shares were up as much as 20% on the news. 

As of 1:42 p.m. EDT, the company's stock was up 12.5%.

So what

Investors were pleased to see that Blackstone, one of the world's leading investment firms, is investing $150 million in 21Vianet Group, which will make the firm one of the company's largest institutional stockholders.

21Vianet Group said in a press release that the company intends to use the proceeds from the investment for capital expenditures. 

Line and bar graphs on a dark green background.

Image source: Getty Images.

The company's founder and executive chairman, Josh Chen, said in a statement, "We are delighted to welcome Blackstone, one of the world's leading investment firms, to partner with us to fuel our next phase of growth." He added, "This investment is a valuable vote of confidence in the strategy being pursued by our team."

Investors clearly agreed that the Blackstone investment was a good move for the company and pushed 21Vianet Group's stock up throughout the first half of the trading day. 

Now what 

Shares of 21Vianet Group are up an impressive 195.7% over the past six months, compared to the S&P 500's 3.3% loss. Over the past few months, investors have focused much of their attention on companies like 21Vianet Group that they believe will be able to ride out a U.S. recession and weather other economic storms occurring around the globe. But investors should expect more volatility in the market as near-daily news about the economy and the pandemic surface.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

VNET Group, Inc. Stock Quote
VNET Group, Inc.
VNET
$5.80 (-2.85%) $0.17
The Blackstone Group L.P. Stock Quote
The Blackstone Group L.P.
BX

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