Equinix (EQIX) is the worldwide leader in the colocation business (big data centers where Companies host their servers and mission critical infrastructure). Equinix was founded in 1998 by Jay Adelson and Al Avery, to create a neutral place where networks could exchange their information, and content providers could connect to the widest possible number of Internet Providers. The Company survived the dot-com bubble burst, in spite of several competitors going bankruptcy as the market experienced a data center glut, and many Internet Companies (key customers for the sector) struggled because of poor business models. Key to Equinix's survival was the neutral model, a great management team and a merger in 2002 with Pihana and i-STT (two network-neutral data center providers serving the Asia-Pacific region) that also guaranteed an investment by the Singapore based STT Telemedia. At that time, the stock was priced for bankruptcy, and the Company had a market cap of a few million dollars only.

Many telecommunications companies left the colocation data center business at that time, and Equinix took advantage of the situation acquiring several distressed properties for a few cents of a dollar in the following years.

In 2007 the Company acquired IXEurope, and a footprint in the most important European markets.

Recently, Equinix announced its intention to buy Switch and Data, thus strengthening its position as the leader in the sector and adding a few strategic US markets.

There is no doubt that EQIX is one of the greatest turn around stories in recent times, being also rewarded as one of the best performing stocks on Nasdaq after 2002 (click to enlarge).

We still believe the colocation market and Equinix do represent very interesting investment opportunities.

You may follow our daily diligence on Equinix at this link.

Our recent articles on Seeking Alpha are listed here.

Interesting sources:

Equinix web site, I/R, latest Investor presentation, Non-Financial Metrics, Yahoo MB, Tier 1 Research, Data Center Knowledge, Telecom Rumblings, Data Center Links, Data Center Map, Ask Dr Peering, Peering DB.

Updated on December 2009.