The litigation, filed by Levi & Korsinsky, LLP, centers on allegations that Cogent misled shareholders regarding the viability of its Sprint wireline acquisition. Management had reportedly projected 5% to 7% annual revenue growth and a $500 million wavelength revenue run rate by mid-2028. Central to the complaint is the claim that while the company touted a backlog of 2,700 unique wavelengths, approximately 90% of those prospects were unlikely to convert into paying customers.

These disclosures coincided with a 98% reduction in the company’s dividend, effectively ending a streak of 52 consecutive quarters of growth. Joseph E. Levi, lead counsel, stated that the company’s public narrative regarding dividend sustainability and conversion risks failed to align with the reality shareholders ultimately faced. The suit, currently pending in the U.S. District Court for the District of Columbia, argues that investors purchased shares at artificially inflated prices based on these optimistic projections.