Csquare Hit by Short Seller Claiming Its Shares Are Worth $0

Dalrymple argues the portfolio is built on assets with a record of failure. He says more than half came from Cyxtera, which filed for bankruptcy, and that the rest were Brookfield-owned facilities, one group of which "de facto defaulted" on its debt.

He also targets the growth plan. By his account, Csquare intends to make about $4 billion of investments at returns above 20 percent to almost triple the sellable megawatts offered by its legacy colocation sites. Dalrymple estimates returns on all-in costs will fall below the cost of capital, which he says would make each new deployment value-destructive.

The third claim concerns financing. Dalrymple says many of the best sites were bought through asset-backed securities (ABS), where lenders are repaid from the asset's future performance, and that about 95 percent of easily upgradable vacant space is pledged to ABS holders. In his view, that structure is what leaves shareholders in a deeply subordinate position.

Why it matters for capacity

Csquare was formed in April 2024 when Brookfield combined Cyxtera and Evoque. DCD puts the portfolio at more than 80 facilities, 3.5 million sq ft (325,160 sqm) and 400 MW of capacity. Those megawatts are the base on which the expansion plan rests.

For operators and customers, the dispute is about who pays to add power and floor space inside older colocation sites. If lenders hold first claim on the most upgradable space, as Dalrymple alleges, equity funding for new halls could become harder to raise. The report does not say how any of this would change delivery dates.

What the company has said

Csquare chief executive Spencer Mullee told DCD last year that the portfolio was strong and that customer churn stayed very low through the Cyxtera bankruptcy. He said enterprise business in the 1 MW to 5 MW range continues alongside AI customers. That interview predates the short report and is not a response to it.

What is not confirmed yet

Csquare has not publicly answered the allegations in the sources reviewed. Dalrymple's estimates of returns, cost of capital and ABS pledges are his own and have not been independently verified. Watch for a company statement and for whether the ABS and expansion terms are addressed in Csquare's filings.