The lawsuit, filed by Hagens Berman Sobol Shapiro LLP, contends that Cogent misled shareholders regarding the nature of its wavelength business. Plaintiffs allege that the company touted an "illusory" backlog, despite knowing that many customers were either unwilling or unable to accept service deliveries. This discrepancy reportedly inflated expectations for the company’s revenue and stock value.

Financial cracks appeared in February 2025 when Cogent reported a 20% sequential decline in its backlog and removed 1,500 stale orders, causing the stock price to drop. The situation deteriorated further as management admitted to a lack of defined installation windows and eventually stopped reporting backlog data altogether in early 2026. By May 2026, the company conceded that customers were repeatedly pushing back on installations, confirming concerns that the previously reported figures did not reflect actual demand. Investors have until September 21, 2026, to apply for lead plaintiff status.