After Equinix lost more than 30% in stock value within one day an investigation on behalf of investors of Equinix (EQIX) over possible securities laws violations by Equinix was announced.
The investigation by a law firm on behalf of EQIX investors whether Equinix, Inc. has violated federal securities laws by issuing false and misleading statements to its shareholders. Foster City, California based Equinixs 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.
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 Equinixs 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.