Short seller claims Equinix has accounting issues and operational problems.

1 min read


Key Points:

  • Short seller accuses Equinix of accounting manipulation and questions its operational viability
  • Hindenburg Research claims Equinix artificially inflates profitability metric and oversubscribes power capacity

The leading short seller, Hindenburg Research, published a report alleging that Equinix, the world’s largest data center REIT, is misleading investors through accounting manipulation. The report suggests that Equinix has been intentionally inflating its adjusted funds from operations (AFFO) by misclassifying maintenance expenses as growth capex. This practice has led to an overstatement of AFFO by at least 22% last year, with a cumulative $3 billion boost since 2015. The report also raises concerns about Equinix’s operational viability, claiming that the company has oversubscribed its power capacity, putting it at risk of not fulfilling contract obligations. Hindenburg suggests that Equinix may struggle to meet the increasing power demands of AI-driven data center operations, casting doubt on the company’s future prospects.

Equinix’s stock price dropped following the publication of the report, but the company has stated that it is investigating the claims made by Hindenburg. Analysts and industry leaders have been hesitant to comment on the allegations, with some comparing the accusations to past criticisms of other data center REITs. While Equinix has long been seen as a stable player in the data center sector, these allegations come on the heels of significant leadership changes at the company. As the industry awaits further developments, the accusations against Equinix highlight the potential risks and challenges faced by data center operators in an increasingly competitive and fast-evolving market.

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