Cogent Communications Faces Class Action Over Wavelength Backlog Claims

The complaint, filed by law firm Levi & Korsinsky on behalf of SueWallSt, targets Cogent’s public disclosures following its acquisition of Sprint wireline assets. Plaintiffs claim management promised annual revenue growth of 5% to 7% and touted a robust backlog of over 2,700 unique wavelength opportunities. However, the lawsuit contends that up to 90% of this backlog was unlikely to convert into paying customers, a reality that remained undisclosed during the class period.

Financial consequences for shareholders have been severe. Cogent shares plummeted from a peak exceeding $86.00 in November 2024 to under $17.00 following revelations of the backlog failure and a 98% reduction in dividends. Attorney Joseph E. Levi noted that the company failed to reconcile its aggressive performance projections with the conversion risks that investors ultimately absorbed. The case, currently pending in the U.S. District Court for the District of Columbia, seeks to recover losses for those who purchased CCOI securities at prices allegedly inflated by these optimistic, yet purportedly inaccurate, growth narratives.