The complaint centers on claims that Cogent misrepresented the viability of its wavelength backlog as a reliable indicator of future revenue growth. According to the litigation, much of this backlog was illusory, consisting of orders from customers either unable or unwilling to accept delivery. The firm alleges that management touted these figures to inflate investor expectations while failing to disclose that a significant portion of the demand was unlikely to convert into actual revenue.
Market confidence began to erode in early 2025 when Cogent reported a 20% sequential decline in its backlog and removed 1,500 stale orders. Subsequent financial reports confirmed the trend, as the company struggled with installation capacity and customer pushback on service acceptance. By February 2026, Cogent ceased providing backlog data entirely, a move that preceded further stock price volatility. Hagens Berman partner Reed Kathrein stated the investigation aims to determine if management intentionally promoted these metrics to disguise the company’s actual ability to secure earned revenue.
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