Equinix, Inc. Investor Files Lawsuit Alleging Securities Laws Violations

If you purchased common stock of Equinix, Inc. (NASDAQ:EQIX) during the period between July 29, 2010 and October 5, 2010, you have certain options and there are strict and short deadlines running. Deadline: May 2, 2011. Those EQIX stockholders and current long term EQIX investors, including those who purchased (also) prior to July 2010 EQIX shares and presently hold those shares, should contact the Shareholders Foundation, Inc.

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
Equinix
Case Name: 
Equinix Shareholder Class Action 03/04/2011
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: EQIX
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
03/04/2011
Class Period Begin: 
07/29/2010
Class Period End: 
10/05/2010
Court of Filing: 
U.S. District Court for the Northern District of California
Deadline To File for Lead: 
05/02/2011
Summary: 

Following a steep 30% price drop in EQIX shares last October an investor now filed a in the United States District Court for the Northern District of California against Equinix, Inc. over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff alleges on behalf of purchasers of Equinix, Inc. (NASDAQ:EQIX) common stock during the period between July 29, 2010 and October 5, 2010 that Equinix and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing between July 29, 2010 and October 5, 2010 materially false and misleading statements regarding its business and financial results. Foster City, California based Equinix’s 12 month revenue went from $286.92million in 2006 to $882.51million in 2009. Its Net Income went from a Net Loss of $6.77million in 2006 to a Net Income of $69.43million in 2009. Shares of Equinix, Inc. (Public, NASDAQ:EQIX) saw an overall upward trend in 2006 and 2007 reaching almost $115 per share in Fall 2007. EQIX shares decreased in the first half of 2008 to under $60 per share before regaining value in mid 2008 to almost $98 per share. The financial crisis caused shares of Equinix to fall as low as $35.14 per share. But EQIX shares regained value in early 2009 and closed 2009 at over $106.15 per share. 2010 started strong for Equinix shares but then EQIX fell to under $80 in mid July 2010. But EQIX shares were able to regain value during August and September.
Specifically, so the lawsuit, defendants failed to disclose that Equinix was having difficulty with the integration of Switch & Data Corporation Facilities Company (acquired in April 2010) into its operations due to a decline in bookings prior to the close of the acquisition and due to Equinix’s aggressive synergy plan. The plaintiff claims that defendants further continuously hyped demand for Equinix’s colocation services as being robust and failed to disclose that its business model was not working and was causing Equinix, Inc. to experience increased churn and pricing pressure on its colocation services. As a result of defendants’ false statements, so the plaintiff, Equinix’s stock traded at artificially inflated prices between July 29, 2010 and October 5, 2010, reaching a high of $105.09 per share on October 5, 2010.
Then on October 5, 2010, after the close of trading, Equinix filed its Form 8-K with the U.S. Securities and Exchange Commission and for the first time disclosed lowered third quarter and full year guidance. In the Form 8-K filed Equinox stated, in part, as follows: “Equinix now expects third quarter revenues to be in the range of $328.0 to $330.0 million, the midpoint of which is 2.2 percent lower than the midpoint of its previous outlook, and total revenues for the full year to be approximately $1,215.0 million, which is 1.2 percent lower than the midpoint of its previous outlook. This updated guidance is due to underestimated churn assumptions in Equinix’s forecast models in North America, greater than expected discounting to secure longer term contract renewals and lower than expected revenues attributable to the Switch and Data business acquired in April 2010.” On October 05, 2010 Equinix, Inc shares traded again as high as $105.09 per share, but lost over 30% value to under $70 per share on October 06, 2010.