George Soros Doubles Down on Equinix

Company has been successfully expanding its operations and is run by a vigilant, experienced leader

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Jun 21, 2016
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During the first quarter George Soros (Trades, Portfolio) doubled his stake in Equinix (EQIX, Financial).

Equinix offers its services to enterprises, financial services companies and content and network service providers. It connects companies directly to customers and partners inside the world's networked data centers. The company's network and cloud-neutral business model also contributes to its success in the market. It offers customers direct interconnection to an aggregation of bandwidth providers rather than focusing on selling a particular network. The providers in the company's sites include the Internet service providers (ISPs), broadband access networks (DSL/cable) and international carriers. Its customers include carriers, mobile and other bandwidth providers, cloud and IT services providers, content providers, financial companies and global enterprises.

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Equinix has a market cap of $25.96 billion, a P/E ratio of 256.10, an enterprise value of $32.45 billion, a P/B ratio of 5.40 and a dividend yield of 1.85.

Soros may have decided to invest in Equinix because the company is expanding.

According to Equinix Inc most recent 10-K filing:

In May 2015 we announced an offer for the entire issued and to be issued share capital of Telecity Group PLC (TCY, Financial) (“TelecityGroup”), valued at approximately £2.4 billion, or $3.8 billion in U.S. dollars. The transaction closed in January. The total consideration consisted of $1.7 billion in cash and 6.9 million shares of our common stock, valued at $2.1 billion.

TelecityGroup was founded in 1998; it is a European carrier-neutral datacenter and colocation center provider. It specializes in the design, building and management of highly connected, resilient and secure environments.

Another reason why Soros may have decided to double his stake in Equinix is because the company has nearly 20 years of experience with the relentless philosophy of “We Undo Impossible.” In its industry, Equinix has established 145-plus data centers in 40 markets on five continents worldwide. This technology is enabling businesses to get to their end users/customers globally within 10 milliseconds or less.

Soros also may have been persuaded to double his stake in Equinix because the current CEO of Equinix is Stephen M. Smith. Smith has 16 years of experience with Electronic Data Systems Corporation, including working as chief sales officer, president of EDS Asia-Pacific and president of EDS Western Region. He also served for eight years in the U.S Army.

Below is a Peter Lynch Chart for Equinix Inc.

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With the addition of 108,897 shares, Soros now owns 206,215 shares of Equinix.

One of the hardest things to judge is what level of risk is safe. There are no universally valid yardsticks: each situation needs to be judged on its own merit. In the final analysis you must rely on your instincts for survival. –George Soros (Trades, Portfolio),"The Alchemy of Finance."

Cheers to your investment success.

Disclosure: Author does not currently own any shares of this holding.

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