NEW YORK ( TheStreet) -- Shares of Datalink ( DTLK) fell in extended trades on Tuesday after the Chanhassen, Minn.-based data center operator announced a dilutive stock offering.

In a statement after the closing bell, Datalink said it's selling 2.2 million common shares while a selling shareholder is offering up an additional 800,000 shares.



The stock was last quoted at $5.90, down 10.3%, on light after-hours volume of slightly more than 11,000, according to Nasdaq.com. The shares closed Tuesday's regular session at $6.58, off 2.5%, on volume of 183,000.

The company said it plans to use its share of the net proceeds generated by the offering "for potential acquisitions of other businesses that will complement its current business model and growth plans." As of Dec. 31, Datalink had roughly 13.1 million outstanding common shares on a fully diluted basis.

Craig-Hallum Capital and Canaccord Genuity are acting as joint book-running managers for the offering, which is expected to price the week of March 7, according to a regulatory filing with the Securities and Exchange Commission. The filing also discloses the deal has a 15% over-allotment option, allowing for the potential sale of an additional 450,000 shares.

Although Datalink's stock has risen nearly 60% in the past year, it's seen a marked pullback since hitting a 52-week high of $9.05 on Feb. 7. In fact, it's been a volatile six months for the shares, which plumbed their 52-week low of $2.93 on Sept. 16, 2010.

Datalink reported its fiscal fourth-quarter results on Feb. 17, beating Wall Street expectations with its adjusted profit of 24 cents a share on revenue of $91 million. At current levels, Datalink shares are trading at a forward price-to-earnings multiple of a less than 10X.

-- Written by Michael Baron in New York.

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