Market Commentary and Intraday News

Equinix soars as board Oks REIT plans

251 days ago

(AP:REDWOOD CITY, Calif.) Shares of Equinix surged to their highest level in more than 11 years in morning trading on Thursday as the data center operator's board approved plans to convert to a real estate investment trust.

REITs receive favorable tax treatment but must pay out a high percentage of their income in dividends. Their securities sell like stock on major exchanges.

"We are committed to creating long-term shareholder value. The REIT structure supports this objective and positions us to achieve profitable, strategic growth domestically and internationally," Executive Chairman Peter Van Camp said in a statement.

The Redwood City, Calif. company said if it's successful in its conversion it expects to be able to claim REIT status for tax-related purposes starting Jan. 1, 2015.

CEO Steve Smith said that by converting to a REIT Equinix will be able to become more competitive, as many of its peers operate as REITs.

The company anticipates taking on about $50 million to $80 million in costs to support the conversion process. It foresees additional annual compliance costs of approximately $5 million to $10 million if the conversion goes through.

Equinix Inc.'s stock rose $17.63, or 9.4 percent, to $204.18 in morning trading after rising earlier in the session as high as $212, the highest point since December 2000.

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