Cogent Communications Holdings, Inc.

A securities class action has been filed against Cogent Communications Holdings, Inc. (CCOI) on behalf of all investors who purchased or otherwise acquired Cogent Communications securities between February 29, 2024 through May 2, 2026. This case has been filed in the USDC – DC.

According to the complaint, during the class period, defendants failed to disclose:

1. that the vast majority of the purported orders in Cogent’s optical wavelength “backlog” were unlikely to ever result in a paid order;
2. that large quantities of the customers in Cogent’s purported optical wavelength “backlog” were unable or unwilling to accept delivery even if Cogent was in a position to provision the wavelength in a timely manner;
3. that, as a result of (a)-(b) above, defendants had materially misrepresented customer demand for Cogent’s optical wavelength services and the nature of the Company’s purported “backlog” of wavelength orders;
4. that, as a result of (a)-(c) above, Cogent was not on track to achieve its revenue and margin targets and such targets lacked a reasonable basis in objective fact;
5. that Cogent did not have the financial capacity or business fundamentals to maintain its long-standing dividend policy; and
6. that there was a material, undisclosed risk that defendant Schaeffer would be forced to sell vast quantities of Cogent stock as a result of his high-risk pledging activities, thereby further depressing the price of Cogent stock in the event the truth regarding Cogent’s “backlog,” demand issues, and financial position were ever revealed.

Plaintiff alleges that based on defendants’ false and misleading statements to investors about Cogent’s backlog, customer demand, and the Company’s ability to maintain its dividend policy, Cogent’s stock price reached a class period high of more than $86 per share only to fall to less than $17 per share in the days following the class period’s end, a decline of more than 80%.