Chip Newcom, director of investor relations at Equinix
At Equinix, three of our top five shareholders are passive index managers representing more than 20 percent of our registry. During the first half of 2018, Vanguard, our largest shareholder and also the largest passive investor in the real estate sector, rebalanced its real estate investment trust (Reit) funds from tracking the MSCI US REIT Index to the broader MSCI US IMI Real Estate 25/50 Index.
The change added tower Reits [vehicles that invest in the cell phone towers that underpin 5G technology], which represented 14 percent of the new weighting compared with 0 percent in the old index. Equinix subsequently dropped from the third-largest constituent in the index to the fifth-largest, and over the first half of 2018 Vanguard sold roughly 1.4 percent of our float.
Through the entire reweighting cycle, shareholder surveillance and regular updates to the management team were key. At Equinix, the investor relations team hosts a quarterly update with our chairman, chief executive and CFO to update them on major changes to our shareholder base. This provided a forum to explain why there was pressure on the stock and when the rebalancing would end.
During those six months when Vanguard rebalanced, our stock fell 3.8 percent while the S&P 500 increased 0.8 percent.