Equinix Inc. (EQIX) shares slumped Wednesday after short seller Hindenburg Research disclosed that it had a short position in the data center and interconnection services real estate investment trust (REIT), accusing the company of questionable accounting and misleading investors about its ability to take advantage of the artificial intelligence (AI) boom.

In a report published Wednesday, Hindenburg said the decision came after it completed “extensive research,” including interviewing former employees. It charged Equinix with “major accounting manipulation, core business decay, and selling an AI pipe dream as insiders cashed out hundreds of millions.”

Equinix on Wednesday told Investopedia it was reviewing Hindenburg's claims. “We take these matters seriously, and we will not respond further to the claims during our review. We will report back once that review is complete, as appropriate."

Hindenburg argued in its report that Equinix overstated its adjusted funds from operations (AFFO)—the key profitability metric for REITS—by 22% in 2023 alone. It added that the company’s two main revenue sources, the leasing of data center rack space and fast, direct connection between customers and providers, are “being disrupted by large cloud providers such as Amazon.com Inc. (AMZN), Google (GOOGL), and Microsoft Corp. (MSFT).”

The activist investor also pointed out that investors saw Equinix as one of the companies that will be a beneficiary of the soaring demand for AI. However, it argued that Equinix’s “power-constrained facilities” won’t be able to handle the electrical demand required for AI products.

Hindenburg also claimed that Equinix insiders have sold more than about $327 million in company stock since 2019, including approximately $112 million sold by its chief executive officer.

Hindenburg concluded by saying that it believes “Equinix’s hefty valuation premium, claimed market leadership, and growth prospects will soon reverse course.” Equinix shares, which hit an all-time high earlier this month, closed Wednesday down 2.3% at $824.88, after dropping as low as $796.90 during the session.