Charles J. Meyers, president and chief executive officer of Equinix, poses at its offices in Redwood City, California, on December 18, 2018.
Nhat V. Meyer | Gulf Digital First Media | Mercury News via Getty Images
Wednesday Hindenburg Study Aimed exist Equinics$80 billion data center provider, and accused the company’s management of selling “artificial intelligence pipe dreams” to shareholders while manipulating key metrics to boost profitability.
Hindenburg said it has taken a short position in Equinix, meaning it is betting that the real estate investment trust’s (REIT) share price will fall.
Equinix shares plunged 7% in pre-market trading following the report. Equinix said its customers include Amazon, Google and Microsoft’s cloud unit. website.
Short sellers say Equinix reports maintenance expenses – the REIT’s main cost center – as growth expenses, which makes “the company’s cost to maintain its revenue base lower than it actually is.”
Former Equinix employees and executives allegedly told Hindenburg that pressure to misclassify capital expenditures as growth rather than maintenance came from “senior management.”
Hindenburg said the “questionable” accounting allowed Equinix to increase adjusted funds from operations, a metric the company also uses to determine executive stock grants.
Equinix was founded in 1998 and became a real estate investment trust in 2015. According to one company, it had more than 13,000 employees as of December 2023. Supervision filing.
In its most recent earnings report, the company touted its “critical” role “in a world driven by artificial intelligence.”
Hindenburg has taken short positions in other high-profile companies, including Nikola, Icahn Enterprises and Gautam Adani Group.
Equinix did not immediately respond to a request for comment.
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