Dow Jones: "Equinix Up -2: 3Q Rev Likely To Exceed $2.2M - Analyst"
quicken.excite.com
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Peter Van Kamp, Equinix's chief executive, said he couldn't discuss the company's upcoming financial report, but called attention to a series of recent developments.
"We've announced a number of customers, like IBM, Schwab, Ogilvy & Mather, and AT&T," Van Kamp said.
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Actually, I don't remember them announcing that AT&T is a customer up to now unless I missed this when I was checking back through their press releases or fact sheet: equinix.com .
By the way, I wonder if EQIX is any danger of losing customer Sitesmith that was recently purchased by MFNX. MFNX as you know is the owner of the PAIX ( paix.net ) which competes with EQIX (and which was originally founded I believe by EQIX technical management). PAIX is supposed to be run separately from MFNX to preserver its neutrality, so it would be interesting to see if Sitesmith stays with EQIX inspite of the acquisition. Perhaps it makes sense to use both sets of facilities.
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I still think this is a good speculative investment for the aggressive part of a tech portfolio but as a medium-to-long term hold not a short term deal (especially as my shares, at $12.80, are currently down 40% - but I'm looking to average down once this reverses trend of making new lows):
- Investor list and customer list is shaping up to look like a who's who of blue chip tech. The recent $90 million multi-year deal with IBM was IMHO a good confirmation that they've got a market-leading product.
- Tendency of big customers to use several different co-location vendors instead of relying on just one for most-critical apps may help keep the revenue flowing in the face of competition.
- "Neutral" model is demonstratably diffferent from hands on services approach of gorilla EXDS/GlobalCenter.
- Market cap isn't out of control yet, and as this stock wasn't trading back in March, it doesn't have an astronomical all-time high to live down.
- Stock still seems pretty much overlooked.
- Epoch partners are pretty good at getting the word out (they were an co-underwriter) and they press release their well-researched notes on the company.
Some possible negatives to watch:
- Lot of data center building activity going on in US and Europe. For example, check out colo.com (IPO coming up soon - already filed) and relera.com . Not to mention, MFNX's PAIX opening a new center recently, EXDS/GlobalCenter, etc. etc. Wonder if all this capacity may lead to price erosion as happened to intermediate and international telecom.
- Whatever the details of this sector, people are going to view EXDS/GlobalCenter as the unbeatable gorilla and other players as second tier. One solution: Own EXDS too. (I am long EXDS).
- New company with big infrastructure spend at a time when profits are coming back into fashion.
Anyway, I don't expect the stock to do much until tech comes back. When the blue-chip techs: IBM, CSCO, INTC and MSFT are depressed, most people will be unlikely to explore more exotic new techs.
All thoughts welcome on above ranting. |
