Why Is Cyxtera Technologies (CYXT) Stock Down 27% Today?


  • Cyxtera Technologies (CYXT) stock is taking a beating on bankruptcy news.
  • The company is entering bankruptcy protecting as part of a restructuring agreement.
  • It’s also still considering a sale of seeking a major new investor.
CYXT Stock - Why Is Cyxtera Technologies (CYXT) Stock Down 27% Today?

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Cyxtera Technologies (NASDAQ:CYXT) stock is falling hard on Monday after the data center company revealed a bankruptcy filing.

Cyxtera Technologies is using a Chapter 11 bankruptcy filing to facilitate its ongoing restructuring plan. It’s doing so after reaching a Restructuring Support Agreement with certain lenders holding more than two-thirds of its outstanding loan.

The process has the company acquiring a commitment for $200 million in debtor-in-possession financing from some lenders. The company will use these funds to operate through the restructuring and afterward as well.

While Cyxtera Technologies expects the bankruptcy to strengthen its financial position and deleverage its balance sheet, it isn’t giving up on a sale. The company has been actively seeking a buyer or a major commitment from a new investor.

Nelson Fonseca, CEO of Cyxtera Technologies, said the following about the bankruptcy filing:

“We have thoroughly evaluated options to enhance value for the Company and our stakeholders. Together with our Lenders, we determined that initiating this process is the best path forward for Cyxtera and our stakeholders as we pursue new opportunities for growth.”

CYXT Stock Movement Today

As investors would expect, shares of CYXT stock are taking a beating with the bankruptcy news. That comes alongside some 1.55 million shares changing hands as of this writing. For comparison, the company’s daily average trading volume is about 1.6 million shares.

CYXT stock is down 26.9% as of Monday morning.

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2023/06/why-is-cyxtera-technologies-cyxt-stock-down-27-today/.

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