Equinix: Equinix accused of major accounting manipulations

Short seller Hindenburg Research has accused data center REIT Equinix of "major accounting manipulations." The investigative reporting and researching company claims that Nadaq-listed Equinix overstated its adjusted funds from operations (AFFO), a key profitability metric for REITs, by at least 22 percent in 2023 alone.

The report states: "The company also reported a sudden spike in growth CapEx on its balance sheet, a dynamic that has continued for almost 10 years. This shift has fueled Equinix’s stellar non-GAAP reported AFFO metrics and enriched its top executives."

Hindenburg estimates that the alleged manipulation of CapEx has resulted in a $3 billion boost to AFFO since 2015, and a $295.8m in stock award grants to top executives. The company further alleges that Equinix has been overselling power capacity, hoping that customers won't use all the power they've contracted for.

Equinix said, “We are aware of the report and in the process of reviewing claims made therein. We take these matters seriously, and we will not respond further to the claims during our review.  We will report back once that review is complete, as appropriate. We remain confident that our distinctive advantages create significant long-term opportunity for Equinix and continue to see Equinix as highly relevant to customers as they pursue their digital transformation agendas and deploy distributed, hybrid, and multi-cloud infrastructure as the preferred architecture of choice.”