Data Centers Growing, But Marketcaps Keep Shrinking

November 21st, 2008 by · 1 Comment

DataCenterKnowledge has a nice article today summarizing the current market valuations of datacenter-related stocks. It is a shocking table that reminds us just how ugly things are out there. In the financial markets anyway…

With the exception of Dupont Fabros Technology (NYSE:DFT, news, filings) which is directly constrained by lack of access to the capital markets, the outlook for the sector remain solid with no slowdown in demand. And yet since October 1, Digital Realty Trust (NYSE:DLR, news, filings) is off 48%, Equinix (NASDAQ:EQIX, news, filings) is down 47%, Switch & Data (news, filings) is off 57%, Terremark (news, filings) [a subsidiary of Verizon (NYSE:VZ, news, filings)] is off 60%, Rackspace is off 33%.  Wow, when the tide went out, it really went out!   These companies had good earnings meeting or exceeding expectations, and still their stocks are getting annihilated.

I guess it just demonstrates that if people don’t want to own stocks, it doesn’t matter how well a company performs. They’re still going to sell.   The businesses are sound, they will be fine – shareholders however had better hunker down, at this rate it’s going to be a long, cold winter.

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Categories: Datacenter · Financials

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  • Parkite says:

    Equinix in particular was way, way overvalued for quite awhile. Before the meltdown its forward P/E was over 100. And they aren’t exactly frugal with employee stock options at Equinix. How come there is no insider buying at these levels?

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