Following the recent weakness in the share price for $CCOI (Cogent Communications Holdings Inc), I wanted to focus on the recent improvements for the company in the video attached.
Link: youtu.be/zOwlN5j5jrs?si=i-w0-MGhF9m9C1hg
The position has been painful in the short term, but the reason for holding it has not changed. In my view, the market is still focused on the headline share price decline and the perception of balance sheet stress, while missing the fact that the underlying situation has materially improved.
Cogent has now closed the sale of 10 data centers for $225 million in cash. The proceeds strengthen liquidity, reduce refinancing risk, and should help lower interest expense as debt is paid down. At the same time, those sold assets carried operating costs, so the transaction should also remove expenses from the business. The net effect is a cleaner, less risky balance sheet and a better earnings setup over time.
The company is still not a simple story, there are moving parts around the legacy Sprint assets, T-Mobile payments, IPv4 monetization, refinancing, and the remaining data center portfolio but the direction of travel is important. The business is becoming easier to understand, the balance sheet is being cleaned up, and the refinancing risk appears to be falling.
The share price has moved sharply lower, but I am focused on whether the business value is improving or deteriorating. Right now, I believe the fundamentals are improving while the valuation has become more attractive.
This has been uncomfortable, but I do not see the recent update as negative. I see it as another step toward reducing risk and improving the long-term setup for Cogent.... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Thanks for sharing this. I agree the datacenter sale improves liquidity and helps with refinancing risk in the near term. That said, the market’s reaction isn’t just about sentiment or headline price moves. Cogent is still dealing with negative margins, slower than expected growth in several segments,... Show More
I’m not disagreeing with that. My point is just that the market isn’t going to give Cogent credit for the ‘cleaned-up’ story until the reported margins and growth actually show up in the numbers. Even if the operational side has turned, investors want to see it in the financials before they re-rate the... Show More
Thank you for the update. Very welcome.
However, saying that Cogent is now at 6% is ( excuse me, with respect) misleading. At one point, you allocated approximately 11.7% of all funds to it. That is the true measure of concentration and risk, based on size.
Don't take this the wrong way - I'm... Show More
@RobertMERC ... if/when you have the time, of course, an update involving earnings would be more than welcome - i think it’s necessary... thanks. All the best! ... Show More
6 replies
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Tue Aug 11 2026 03:03:26 GMT+0000 (Coordinated Universal Time)
