Hindenburg releases Equinix short report, alleges accounting manipulation

In a short report published by Hindenburg Research, the firm states: “Even if you ignore the findings of our investigation and take the financials of Equinix at face value, the company trades at elevated levels.” Hindenburg adds: “Our investigation, which included a review of financial and litigation records and interviews with 37 former Equinix employees, industry experts and competitors, revealed that Equinix manipulates its accounting for AFFO, the key profitability metric for REITs. We estimate this metric was overstated by at least 22% in 2023 alone… These accounting manipulations have manifested in what look like obviously distorted company metrics.” The firm further alleges that Equinix’s “manipulation of maintenance CapEx has resulted in a cumulative $3 billion boost to reported AFFO since 2015,” stating that Equinix’s “questionable AFFO accounting has contributed to an estimated $295.8 million in stock award grants to top executives who have personally benefited from these accounting games.”