Ranjit Thomas

Equinix 3Q Results: Vade Retro, Recession

EQIX is one of the few grossly overvalued stocks in this market. It hardly generates any profits, burns a huge amount of cash, hands out a liberal amount of stock and options to its executives, and trades at 4x revenues. The stock is essentially worthless, in my opinion, and one day when they can no longer raise any more debt, will have to file for bankruptcy. Until then, management will give rosy projections and merrily sell their stock to unsuspecting investors who evaluate it on non traditional metrics like proforma EBITDA.

Equinix 3Q Results: Vade Retro, Recession

EQIX is one of the few grossly overvalued stocks in this market. It hardly generates any profits, burns a huge amount of cash, hands out a liberal amount of stock and options to its executives, and trades at 4x revenues. The stock is essentially worthless, in my opinion, and one day when they can no longer raise any more debt, will have to file for bankruptcy. Until then, management will give rosy projections and merrily sell their stock to unsuspecting investors who evaluate it on non traditional metrics like proforma EBITDA.

Equinix: Global Connection Hub for the Internet

This co. trades at 8x revenues, doesn't generate profits or cash and hands out copious amounts of stock to their executives. All measures to value it rely on non-fundamental factors like EBITDA, "maintenance" capex and pro-forma numbers. Incidentally, the concept of maintenance capex is a joke. Most of what they term expansion capex is really recurring capex to replace equipment. The shill game will continue for a while till they can no longer raise more debt. Then perhaps people will come around to valuing it on fundamental factors like earnings and free cash flow (both of which are negative), sending the company to bankruptcy.