Elliott Investment Management Builds Stake in Equinix

Activist investor Elliott Investment Management is growing its stake in a prominent data center real estate investment trust.

Paul Singer’s activist firm has emerged as one of the ten largest investors in Equinix, Bloomberg reported. Elliott previously disclosed it owned 150,000 shares — or 0.2 percent — of the company, but its holding today could not be discerned.

Despite data center development making headlines across the country thanks to the artificial intelligence boom, Equinix’s stock market performance has sagged as providers struggle with expensive projects already bogged down by elevated interest rates. The company’s shares are down 16 percent this year, putting its market capitalization at $76 billion.

Many of Equinix’s problems can be traced back to one day last month, when analysts learned that capital expenditures were going to be higher than anticipated. That sent the stock plummeting.

Elliott’s intentions are not clear, but there are potential buttons the firm may want to see pushed, including additional margin improvements, a buyback or changes to the capital expenditure plan. Elliott and Equinix are reportedly working collaboratively.

“Equinix is focused on executing our strategy and driving value for shareholders,” said a spokesperson for the company. “We regularly engage with our investors, including Elliott, to better understand their perspectives as we advance this goal.”

Equinix, based in California, operates 260 data centers in 33 countries.

Since artificial intelligence became the technology sector’s darling several years ago, companies have rushed to develop data infrastructure needed to support the high-computing power required to support the industry. Tech companies such as Amazon, Google and Microsoft — as well as developers like Blackstone — spent billions to build data centers across the country.

While data centers are being developed at a comparatively high rate in the United States, they carry significant drawbacks. They suck up energy resources, create environmental concerns and draw loud resistance from residents who live near the facilities.

— Holden Walter-Warner