Digital Realty Trust, Inc. (NYSE:DLR) has announced an amendment to its charter, increasing the number of authorized shares of common stock from 392 million to 502 million, effective today. The real estate investment trust, which focuses on data center properties and commands a market capitalization of $60.37 billion, filed the amendment with Maryland's state department and did not alter the number of preferred stock shares, which remains at 110 million.
According to InvestingPro analysis, the company is currently trading above its Fair Value, with shares up 36.85% year-to-date.
Additionally, Digital Realty has entered into an ATM Equity Offering Sales Agreement with a consortium of financial institutions, potentially offering and selling common stock up to $3 billion. This move follows the termination of a previous at-the-market program, which had raised approximately $923.2 million by issuing around 5 million common shares at an average net price of $184.21 per share after September 30, 2024. InvestingPro data reveals the company maintains strong financial health with a current ratio of 1.6, indicating sufficient liquidity to meet short-term obligations.
The new sales agreement, which includes BofA Securities, Citigroup (NYSE:C), J.P. Morgan, and others as sales agents or forward sellers, allows the company to sell shares through ordinary brokers' transactions, negotiated deals, or "at-the-market" offerings. Digital Realty may also sell shares directly to the agents as principals.
The company plans to contribute the net proceeds from the sales to its operating partnership, Digital Realty Trust, L.P., which will use the funds for various purposes, including repaying borrowings, acquiring properties, funding developments, and other general corporate activities.
As a prominent player in the Specialized REITs industry, Digital Realty has maintained dividend payments for 21 consecutive years, demonstrating consistent shareholder returns. Discover more insights about DLR's financial performance and access comprehensive analysis through the Pro Research Report, available exclusively on InvestingPro.
The offering is made under an effective shelf registration statement filed on March 16, 2023, and a prospectus supplement filed today. This strategic move by Digital Realty is based on a press release statement and aims to strengthen the company's financial position and support its growth initiatives.
In other recent news, Digital Realty Trust, a data center REIT, has made several significant financial moves.
The company expanded its stock offering capacity by amending its charter to increase the number of authorized shares of common stock from 392 million to 502 million. Additionally, it entered into an At-The-Market (ATM) Equity Offering Sales Agreement potentially worth up to $3 billion with a consortium of financial institutions, including BofA Securities, Citigroup, and Wells Fargo (NYSE:WFC).
Digital Realty also issued $1.15 billion in 1.875% Exchangeable Senior Notes due in 2029. The net proceeds from this equity offering are intended to be contributed to Digital Realty's operating partnership for various purposes, including repaying borrowings and acquiring additional properties or businesses.
Analysts from various firms have responded to these developments. Citi maintained a Buy rating on Digital Realty Trust and increased the price target to $212. Deutsche Bank (ETR:DBKGn) maintained a Hold rating but lowered its price target to $159. Mizuho (NYSE:MFG) reaffirmed its Outperform rating with a steady price target of $170, while RBC Capital Markets increased its price target to $207.
In the third quarter of 2024, Digital Realty Trust's new leasing volume reached $521 million and a backlog of leases set to commence increased to nearly $860 million. The company's Funds From Operations (FFO) of $1.67 slightly surpassed the consensus estimate of $1.66. Following these results, the company raised its guidance midpoint to $6.70, slightly above the Street's expectation of $6.66.
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