Advertisement
Hindenburg Research has launched an attack on $80 billion data center provider Equinix, claiming that the company’s management is selling “dream technology” that it has copied to shareholders while using questions about practices to increase revenue measurement.
Hindenburg Research took a short position in Equinix, claiming that real estate investment trust (REIT) prices will decrease.
Equinix shares fell as much as 7% in pre-market trading following news of the Hindenburg report. However, they partially recouped their losses with a 3% increase on Wednesday.
According to available information, Equinix’s main customers include technology companies Amazon, Google and Microsoft’s cloud division. Equinix’s website.
According to CNBC, an Equinix spokesperson said in response to these allegations: “We are investigating these allegations and will respond in a timely manner.”
The Hindenburg report accuses Equinix of misreporting health care costs, a significant cost for REITs, as investments in growth plans. This misclassification allegedly creates the false impression that the company’s costs of managing its earnings are lower than they actually are.
Hindenburg said former Equinix employees and executives asked senior management not to allocate capital (capital expenditure).
The so-called “questionable” accounting practice allowed Equinix to exchange money by operation, the metric used to determine contribution to the leader.
Equinix, which was founded in 1998 and turned into real estate investment in 2015, has more than 13,000 employees as of December 2023, according to legal records.
Equinix’s latest earnings report cited technology’s involvement in technical advancement, praising its key role “in a world driven by artificial intelligence.”
Hindenburg Research is known for its short selling and has focused on other valuable companies in the past, such as Nikola, Icahn Enterprises and Gautam Adani Group.