Hindenburg Research, the short-selling activist firm founded by Nathan Anderson, has set its sights on data centre owner Equinix, releasing a report alleging that the nearly $80bn real estate investment trust is manipulating its accounting, according to a report by Bloomberg.
Hindenburg, which holds a short position in Equinix claims that the company has overstated a key profitability metric – adjusted funds from operations – by at least 22 per cent in 2023 and is selling an “AI pipe dream”.
Shares of Equinix dropped 3.5% following the publication of Hindenburg’s report, having climbed roughly 4.9% this year up to Tuesday’s close.
Hindenburg, whose previous targets include financial software firm Temenos and Indian conglomerate Adani Group, also said in the report that Equinix trades at elevated levels even if financials are taken “at face value.”
While Equinox has said that rapid growth in the AI sector is accelerating the company’s growth, Hindenburg claims that the AI boom poses a risk to Equinix’s outlook,
In the report Hindenburg wrote: “This false impression, combined with general market euphoria for AI, has resulted in investors rewarding Equinix as though it is a key AI beneficiary, when the opposite seems true: AI poses a risk to Equinix’s already power-constrained facilities.”
