Equinix ($EQIX) Subpoenaed Over Financial Misconduct Allegations in 2023

Equinix, a prominent data center company, is currently under scrutiny following a subpoena from the US Attorney's office related to allegations highlighted in a Hindenburg Research report. The report accuses Equinix of engaging in potentially criminal financial practices, including capitalizing operating expenses and issuing excessive executive bonuses based on misleading metrics. Further examination reveals a discrepancy in Equinix's reported growth in physical capacity, with Total Cabinets up by 5.2% last year, but Billable Cabinets increasing by only 0.8%. Despite this, occupancy dropped from 82% to 79%. Equinix asserts that 93% of its $3.2 billion capex was allocated for growth. This controversy emerges amidst a period of reported 'record growth' in the data center physical infrastructure market in 2023.