Charles J. Meyers, president and CEO of Equinix, poses in his workplace in Redwood City, Calif., Dec. 18, 2018.
Nhat V. Meyer | Bay Digital First Media | The Mercury News through Getty Images
Hindenburg Research on Wednesday took intention at Equinix, an $80 billion knowledge middle supplier, and accused the corporate’s administration of promoting shareholders an “AI pipe dream” whereas manipulating key metrics to spice up the looks of profitability.
Hindenburg mentioned it had taken a brief place in opposition to Equinix, that means it was betting that shares of the actual property funding belief, or REIT, would fall.
Equinix shares plunged as a lot as 7% in premarket buying and selling earlier than paring again losses at Wednesday’s open to round 3%.
The firm’s clients embrace the cloud divisions of Amazon, Google and Microsoft, in keeping with Equinix’s web site.
“We are investigating the claims and we will respond in due course,” an Equinix spokesperson informed CNBC.
The quick vendor mentioned that Equinix reported upkeep bills — a significant price middle for REITs — as spending on development, making it seem “that the company’s cost to maintain its revenue base is lower than it actually is.”
Former Equinix staff and executives allegedly informed Hindenburg that the strain to misclassify capex as development slightly than upkeep got here “from top management.”
Hindenburg mentioned the “questionable” accounting allowed Equinix to spice up its adjusted funds from operations, a metric the corporate additionally used to find out govt inventory grants.
Equinix was based in 1998 and have become a REIT in 2015. It had greater than 13,000 staff as of December 2023, in keeping with a regulatory submitting.
In its newer earnings reviews, the corporate has touted its “crucial” position “in an AI-driven world.”
Hindenburg has taken quick positions in opposition to different massive names, together with Nikola, Icahn Enterprises and Gautam Adani’s conglomerate.
![Equinix CEO on data center demand and artificial intelligence](https://image.cnbcfm.com/api/v1/image/107376088-4ED4-WEX-022124-Meyers.jpg?v=1708517834&w=750&h=422&vtcrop=y)
Source: www.cnbc.com