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Digital Realty Trust: Bound for a Correction

I am in this industry everyday, through the good times and through the bust period, so lets try to correct a few inaccuracies....

1) The biggest customer is "Savvis", not Navvis. In addition to cloud computing, they also perform managed services, apllications and do some systems intergration. The do not compete with DLR.

2) One of Digital Realty's (DLR) largest investors is Global Innovation Partners or "GI Partners", not GL. GI also owns Telx. Telx main business is cross-connections and access to multiple networks. They also offer colocation. They do not compete with DLR, and actually enhance DLR's offerings.

3) Qwest is a customer of DLR's and recently paid DLR $14m to get out of a Chicago lease in a building that DLR didn't have any space to offer. Now DLR will build out space in a very hot market and offer at a higher rent. DLR will start with the $14m they just received as a termination payout....not a bad deal. Also, Nacchio has not been associated with Q for many years (7+?), so not sure why the reference is here...too many other things to discuss with Q.

4) As a former employee of Equinix, I can tell you that EQIX does not offer the same services as DLR. If you knew this industry, this is probably the biggest stretch in this slanted article. EQIX offers managed colocation, the best "peering" in the world and at a level no other firm can do. EQIX and DLR do not compete.

5) The comment "so they can always build and operate their own centers if they get cheap enough" is out of touch with the current capital markets. This facilities are not cheap ($1000-1500 per sf). Not many firms can secure this much capital, and at a reasonable price. DLR secured a substantial amount prior to the current liquidity/capital crises. This crises will actually drive more business to DLR and others like it due to a lack of reasonably priced capital to build these facilities. Also, unlike 2000-2003, companies with data centers are not going bankrupt and putting facilities on the market for pennies on the dollar. This is because this time around, these companies have many paying customers and have occupancy levels that are in the 50-70% average, and need only approx. 32-35% to reach CF break-even. In the current environment, most of these firms offer more than basic colocation, thus layering services, peering and applications and making more per sf, and per customer.

Although the current markets keep many industries in turmoil, this data center/managed services space is one that is somewhat insulated because the investment is high, leases long and operations critical. I would rate DLR as an outperform in the sector, as they are the leader in the industry. At $51, I would also rate EQIX a buy. Q would be a hold and SVVS a hold or sell.

Disclosure: Long on EQIX, Q, SVVS. Do not own DLR currently, but have been long in the past - owned from $18 to $42. If it goes down much lower, I will probably buy it again as I like their model and how conservatively they are approaching the current market.

Equinix Q2 Earnings Forecast

EQIX is going to kill the EPS estimates. The capital/liquidity crunch is actually working in their favor. With spave already built, on their CapEx, these companies without the $ to spend on a DC in a timely manner will be vying (read....bidding up) for the available space coming online.

The only question I have during the call is "how much of this expansion space is already pre-sold, and what % of pre-sold actually closes across the board" ? I think the answer is somewhere in the 70% (for 1st part) and 88-92% (2nd part).....

Cell-Tower Fatalities: 3G iPhones at Any Price?

I agree. Not too many facts or comparisons here.
With this shoddy journalism, think the only metrics to use going forward are how many subscribers are you going to lose ???

The comments above are what we all look for...what are the dynamics, metrics, comparisons ? Is there a real issue or are you trying to fill a page with meaningless drivel....?

Equinix: Global Connection Hub for the Internet

I know EQIX quite well and agree with the article. With EQIX customer "stickyness" due to peering, the most critical item facing EQIX is to execute and perform on CapEx on building out their sites.

They have done a good job of pre-selling at premium rates to their existing customers in existing markets.....which has been a winning proposition. If they expand TOO much (which, at this time, is a benefit over competitors, so long as the CapEx doesn't get out of hand), I may worry. If EQIX expands (outside of buying an operating company) in a city/country it is not familiar with, then I may sell for fear they are expanding too quickly in unproven territory.

For now, I am long (bought in the last 3 weeks) and expect to be for some time. 6 months from now (as Chicago gets sold), look for earnings to go up and stock price at 90-100. Year end around 120 or so, depending on news...I was a long term hold from 3.00 around early 2003 until late 2007, where I got out at 98. I kicked myself that it went up to 120., but very happy when it went down to 57., so I could get in again (a little higher than that).

One thing is for sure, EQIX is the industry leader and will continue to put some ground between them and their competitors. SVVS has stumbled (funny, the SVVS ceo used to be cfo at EQIX), and the others can't match cash on hand, infrastructure, peering or footprint...

EQIX is a solid buy !

Why I am Selling Thornburg Mortgage

I owned TMA at 24, rode to about 16 and dumped. I bought for the dividend and because I thought I knew them, since my primary residence has a mortgage with TMA. TMA is/was considered "super-prime". If you haven't been through the process, they only take people with strong (750+ fico) credit, good assets, and mutli-million dollar homes at a lower loan-to-value ratio. For example, my home has a 40% LTV. TMA also has 2 appraisals on your home, both seemed to be THE most conservative appraisers in our area, and I have to be honest, really ticked me off at the time.

Since I thought I knew this firm, and think the drag is more what other firms/people did, when is a good time (if any) to get back into this stock ? This board seems to have some pretty intelligent people (exception of bush's fault they invested, etc.), what are your thoughts ? Thanks...