What Happened?
Shares of internet service provider Cogent Communications (NASDAQ: CCOI) fell 3.3% in the afternoon session after company director Lewis H. Ferguson sold a significant portion of his holdings, adding to recent negative sentiment surrounding the company. Ferguson sold 4,000 shares for a total of $81,340, which represented about 17.2% of his stake in that class of stock. Such a sale by an insider often worried investors, as it can suggest a lack of confidence in the company's future. The transaction followed a string of unfavorable news for Cogent. The company recently reported third-quarter results that showed declining revenue. In response, Cogent also slashed its quarterly dividend by approximately 98% to just $0.02 per share. This move led to downgrades from both Wells Fargo and UBS, who cited concerns over the company's performance and growth path.
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What Is The Market Telling Us
Cogent’s shares are very volatile and have had 27 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 9% on the news that the company gave back some of its gains from the previous session. The drop followed a 6.8% rise during the prior trading day. That earlier jump was driven by the board of directors' decision to authorize the resumption of the company's stock repurchase program. Stock buybacks often signaled management's confidence in a company's future, which investors typically viewed in a positive light. However, the subsequent fall in the share price occurred without any new company-specific information being released.
Cogent is down 74.9% since the beginning of the year, and at $19.38 per share, it is trading 76.8% below its 52-week high of $83.44 from February 2025. Investors who bought $1,000 worth of Cogent’s shares 5 years ago would now be looking at an investment worth $333.30.
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