Short thesis on Equinix like prior ‘temporary roadblocks,’ says Wells Fargo

Wells Fargo notes that a short report published by Hindenburg Research is driving weakness in shares of Equinix. The short-seller alleges that Equinix “manipulates” its non-GAAP AFFO metrics and the firm acknowledges that Equinix and other data center REITs “take some liberties” with AFFO add-backs. However, the firm adds that Equinix conforms to maintenance capex classifications, similar to other data centers, and says it has heard similar short theses for years on the group and these “historical short attacks have only been temporary roadblocks.” The firm has an Equal Weight rating and $825 price target on Equinix shares, which are off their earlier lows and down $37.34, or 4%, to $807.24 in morning trading.