Lawsuit filed for Investors who lost money with shares of Cogent Communications Holdings, Inc. (NASDAQ: CCOI)

An investor, who purchased shares of Cogent Communications Holdings, Inc. (NASDAQ: CCOI), filed a lawsuit in the U.S. District Court for the District of Columbia over alleged violations of Federal Securities Laws by Cogent Communications Holdings, Inc. in connection with certain allegedly false and misleading statements.

Investors who purchased shares of Cogent Communications Holdings, Inc. (NASDAQ: CCOI) have certain options and for certain investors are short and strict deadlines running. Deadline: September 21, 2026. NASDAQ: CCOI investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

Washington, DC based Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, South America, Europe, Oceania, and Africa. Cogent Communications Holdings, Inc. (NASDAQ: CCOI) reported that its annual Total Revenue declined from $1.04 billion in 2024 to $975.77 million in 2025, and that its Net Loss declined from $204.07 million in 2024 to $182.17 million in 2025.

On February 27, 2025, Cogent Communications Holdings, Inc. announced its fourth quarter 2024 and year-end 2024 financial results, disclosing that Cogent's annual revenue run rate was only $28 million and its backlog (as explained on the accompanying earnings call that day) declined sequentially from 3,400 in the prior quarter to 2,700 in the fourth quarter. Management explained that Cogent had removed 1,500 orders from its backlog because many orders were more than a year old. Additionally, growth in wavelength connections slowed from 287 net additions in third quarter 2024 to 77 net additions in fourth quarter 2024.

Then, on May 8, 2025, Cogent Communications Holdings, Inc. announced its first quarter 2025 financial results, reporting that revenues in the wavelength business were lower than expected, which had negatively impacted Cogent's earnings, margins, and leverage. Although Cogent had expanded its offering of optical wavelength services to over 880 data centers across North America, wavelength revenues only increased by $200,000 from fourth quarter 2024. Executives further revealed that Cogent now had the capacity to provision 500 orders per month but only expected to be able to convert 5% of its 3,400 order backlog.

Thereafter, on August 7, 2025, Cogent Communications Holdings, Inc. announced its second quarter 2025 financial results, revealing that Cogent only added 147 net connections during the quarter (compared to 204 in first quarter 2025), which was far less than defendants' prior claims that Cogent would be installing 4% to 5% of its 3,433 wavelength backlog (approximately 155 wavelengths) per month.

Then, on November 6, 2025, Cogent Communications Holdings, Inc. announced its third quarter 2025 financial results, reporting that wavelength revenue increased sequentially to $10.2 million and wavelength customer connections only increased sequentially by 281 connections from 1,469 to 1,750. Cogent further revealed that it paused stock buybacks and reduced its quarterly dividend from $1.015 per share to $0.02 per share - a reduction of 98% - ending Cogent's streak of 52 straight quarters of increasing its dividend.

Subsequently, on February 20, 2026, Cogent Communications Holdings, Inc. announced its fourth quarter 2025 financial results, disclosing that wavelength revenue increased sequentially to $12.1 million for the quarter and wavelength customer connections increased sequentially by 314 connections from 1,750 to 2,064. In a break with Cogent's prior practice, defendants refused to provide a specific backlog amount on the accompanying earnings call.

Finally, on May 4, 2026, Cogent Communications Holdings, Inc. announced its first quarter 2026 financial results, reporting wavelength revenue had increased sequentially to $13.6 million for the quarter and that its wavelength customer connections had increased sequentially by just 199 connections from 2,064 to 2,263. During the corresponding earnings call, defendant Schaeffer conceded: "On wavelength installs, we have seen a variety of customers pushing out their acceptance of wavelengths. We actually provisioned more wavelengths in the quarter than we did in the previous quarter, but the customers did not accept them. Decision to push out acceptance is being driven by constraints."

Shares of Cogent Communications Holdings, Inc. (NASDAQ: CCOI) declined from $86.76 per share on November 07, 2024, to as low as $9.00 per share on August 07, 2026.

The plaintiff claims that between February 29, 2024 and May 1, 2026, the defendants made materially false and misleading statements because they failed to disclose the following adverse facts pertaining to Cogent's business, operations, and financial condition, which were known to or recklessly disregarded by defendants that the vast majority of the purported orders in Cogent's optical wavelength "backlog" were unlikely to ever result in a paid order, 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, that, as a result of (i)-(ii) above, defendants had materially misrepresented customer demand for Cogent's optical wavelength services and the nature of Cogent's purported "backlog" of wavelength orders, that, as a result of above allegations, Cogent was not on track to achieve its revenue and margin targets and such targets lacked a reasonable basis in objective fact,that Cogent did not have the financial capacity or business fundamentals to maintain its long-standing dividend policy, and that there was a material, undisclosed risk that defendant David 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.

Those who purchased shares of Cogent Communications Holdings, Inc. (NASDAQ: CCOI) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.