Key Takeaways Lumen is repositioning as an AI network provider, securing $13B in Private Connectivity Fabric deals.LUMN reduced debt by over $5B and cut interest costs, supporting EBITDA growth outlook for 2026.Cogent is growing on-net and IPv4 revenues but faces margin expansion moderation and declining Sprint sales.Lumen Technologies, Inc. (LUMN) and Cogent Communications Holdings, Inc. (CCOI) are both enterprise-focused fiber network providers that deliver high-capacity, long-haul fiber networks powering ...

Core Viewpoint - Ulysses Management has completely divested its position in Cogent Communications, indicating a strategic shift away from the struggling telecom sector [1][2]. Company Overview - Cogent Communications reported a total revenue of $975.8 million and a net income loss of $182.2 million for the trailing twelve months (TTM) [4]. - The company offers high-speed internet access, private network services, and data center colocation, primarily targeting small and medium-sized businesses and enterprise clients [8]. - Cogent's business model relies on recurring fees for connectivity and colocation services, which are essential for bandwidth-intensive organizations [8]. Recent Transaction Impact - Ulysses Management sold 335,982 shares of Cogent Communications, resulting in a valuation drop of $12.88 million for this stake [2]. - The share price of Cogent Communications was $18.05, reflecting a 74% decline over the past year, significantly underperforming the S&P 500, which increased by approximately 15% during the same period [7]. Strategic Insights - The decision to exit Cogent Communications suggests a preference for companies with better earnings visibility and stronger pricing power, as indicated by Ulysses Management's focus on top holdings like Microsoft and Amazon [9]. - Cogent's strategy of providing low-cost bandwidth is under pressure due to increasing competition and declining prices, raising concerns about its ability to achieve stable, profitable growth [10]. - For long-term investors, the emphasis is on assessing the foundational strength of companies rather than merely avoiding underperforming stocks, with a focus on those with reliable demand and lower execution risk [11].

Group 1: Fund Performance - Madison Small Cap Fund underperformed its benchmark, the Russell 2000 Index, with a return of -0.4% compared to the benchmark's 2.2% return in Q4 2025 [1] - Sector allocation negatively impacted the Fund's performance, particularly in the healthcare sector, which was the weakest [1] - The Fund remains cautious about the speculative market, acknowledging that "markets can stay irrational longer than you can stay solvent" [1] Group 2: Cogent Communications Holdings, Inc. - Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is an internet services company with a market capitalization of $941.169 million [2] - The stock closed at $18.80 per share on March 13, 2026, with a one-month return of -28.95% and a 52-week loss of 73.49% [2] - The Fund decided to exit its position in Cogent Communications due to the company's dividend suspension and elevated leverage, which could lead to extreme swings in equity value [3] Group 3: Hedge Fund Interest - Cogent Communications Holdings, Inc. was held by 26 hedge fund portfolios at the end of Q4 2025, down from 31 in the previous quarter [5] - While acknowledging Cogent's potential, the Fund believes that certain AI stocks offer greater upside potential and less downside risk [5]

Company Overview - Cogent Communications operates a global network providing internet, private networking, and data center services to commercial clients, leveraging extensive infrastructure for reliable connectivity solutions [5] - The company generates revenue primarily through recurring service contracts for bandwidth, network connectivity, and colocation facilities, serving small and medium-sized businesses, communications service providers, and bandwidth-intensive organizations [7] Financial Performance - For the trailing twelve months (TTM), Cogent reported revenue of $975.8 million and a net income of -$182.2 million [4] - The latest earnings report indicated service revenue of $240.5 million, a slight decrease from $241.9 million in the previous quarter [9] - The company offers an 11% dividend yield, translating to four quarterly payments totaling $3.05 per share last year [9] Recent Developments - On February 17, 2026, MIG Capital disclosed a new position in Cogent Communications, acquiring 569,220 shares valued at $12.27 million at the quarter's end [1][2] - This new position accounts for 2.08% of MIG Capital's reportable assets under management as of December 31, 2025 [6] - Shares of Cogent Communications have decreased by approximately 72% over the past year, contrasting with the S&P 500's gain of about 20% during the same period [6] Market Position - The new investment by MIG Capital suggests a contrarian approach, as Cogent has been a significant laggard in the market [6][10] - The position is relatively modest compared to larger holdings in MIG Capital's portfolio, indicating a measured bet on a struggling infrastructure provider rather than a high-conviction core holding [10]

NEW YORK--(BUSINESS WIRE)--Rosen Law Firm, a global investor rights law firm, announces an investigation of potential breaches of fiduciary duties by the directors and officers of Cogent Communications Holdings, Inc. (NASDAQ: CCOI). If you currently own shares of Cogent Communications stock, please visit the firm's website at https://rosenlegal.com/submit-form/?case_id=56076 for more information. You may also contact Phillip Kim of Rosen Law Firm toll free at 866-767-3653 or via email at case@r. ...

Core Viewpoint - Rosen Law Firm is investigating potential breaches of fiduciary duties by the directors and officers of Cogent Communications Holdings, Inc. (NASDAQ: CCOI) [1] Group 1 - The investigation is aimed at assessing the actions of Cogent Communications' leadership regarding their responsibilities to shareholders [1] - Shareholders of Cogent Communications are encouraged to visit the law firm's website for more information on the investigation [1] - Contact information for Phillip Kim of Rosen Law Firm is provided for shareholders seeking further details [1]

Company Overview - Cogent Communications Holdings reported a total revenue of $975.8 million for the trailing twelve months (TTM) [4] - The company experienced a net income loss of $182.2 million for the TTM [4] - Cogent has a dividend yield of 10% and its stock price was $26.46 as of February 13, 2026 [4] Recent Developments - 14B Capital Management sold 279,633 shares of Cogent Communications in Q4 2025, valued at approximately $8.25 million [2][6] - Following the sale, Cogent's stake represented 2.95% of 14B Capital's assets under management, placing it outside the fund's top five holdings [6] - The quarter-end value of the remaining stake declined by $13.58 million due to trading and price changes [2] Financial Performance - Cogent's service revenue decreased from over $1 billion in 2024 to $975.8 million in 2025 [9] - The company reported an adjusted EBITDA of $76.7 million in the quarter, with margins expanding to nearly 32% [9] - Despite improved profitability metrics, Cogent still posted a loss of $182 million, only slightly better than the $204 million loss from the previous year [9] Market Position - Cogent Communications operates globally, providing high-speed Internet access, private network, and data center colocation services [7][8] - The company serves small and medium-sized businesses, communications service providers, and bandwidth-intensive organizations [7] - The stock has underperformed significantly, down approximately 70% over the past year, compared to the S&P 500's 20% gain [6]

Core Insights - Cogent Communications (NASDAQ:CCOI) is a Tier 1 internet backbone provider with a significant infrastructure that is relatively unknown to most investors [2][3] - The company is currently trading near multi-year lows while expanding its business, particularly in wavelength services, which are crucial for AI infrastructure and large enterprises [2][6] Company Overview - Cogent operates an all-optical IP network that spans 57 countries and connects to 1,902 data centers globally, directly connecting 7,659 networks, more than any other service provider [3] - The 2023 acquisition of Sprint's wireline business from T-Mobile expanded Cogent's physical footprint, adding 482 owned technical buildings and 3,579 on-net buildings [4] Business Performance - The legacy Sprint wireline business has seen a significant decline, with quarterly revenue dropping from $118 million at the time of acquisition to $43 million by Q4 2025, a 64% decrease [5] - In contrast, Cogent's original business has grown from $155 million to $197 million per quarter during the same period [5] Revenue Insights - Full year 2025 service revenue was reported at $975.8 million, reflecting a year-over-year decline of 5.82%, primarily due to the underperforming legacy Sprint business [5] - Wavelength services, however, have shown strong growth, with revenue increasing by 73.7% year-over-year to $12.1 million in Q4 2025, and customer connections rising by 84.6% to 2,064 [6] Strategic Focus - Cogent is transitioning from its declining legacy Sprint wireline business to focus on high-capacity wavelength services, aiming to capture 25% of the North American market before T-Mobile transition payments conclude in 2027 [6]

Core Insights - Cogent Communications has returned to organic revenue growth after a period of decline following the acquisition of Sprint Global Markets Group, with expectations of continued growth despite revenue declines from the acquired customer base [3] - The company has expanded its EBITDA margin by 800 basis points year over year, primarily due to cost cuts and an increased share of higher-margin "on-net" services [1] - A multi-step plan is in place to improve balance sheet flexibility and refinance upcoming debt maturities, including a proposed corporate restructuring [6][10] Financial Performance - Cogent's revenue mix has shifted significantly post-Sprint acquisition, improving to 61% on-net services, 39% off-net, and less than 1% non-core [1] - The company previously delivered over 10% annual organic growth for 18 years without M&A but averaged approximately 5.5% negative year-over-year revenue growth over nine quarters following the Sprint transaction [3] - The company aims for top-line growth of 6% to 8% and at least 200 basis points of margin expansion per year [11] Debt and Refinancing Strategy - Cogent has a debt structure that includes $600 million secured debt maturing in 2032 and $750 million unsecured debt maturing in 2027 [8] - A refinancing strategy involves creating a subsidiary to hold $623 million of capital lease obligations and using a divisive merger to separate developed-world IRUs associated with roughly $569 million of debt [10] - The company plans to contribute 100% of proceeds from the prospective sale of data centers into the borrowing group to enhance collateral and potentially reduce the cost of capital [16] Data Center Strategy - Cogent has initiated a one-year program to convert 125 of its 482 facilities, investing $100 million primarily into the largest facilities, with completion expected by June 2025 [15] - The company has recognized an "acute shortage" of available data center power and acquired 230 MW of existing power as a scarce resource [14] - A potential sale of 10 data centers is in negotiation, with proceeds expected to exceed previous offers, although the agreement remains subject to due diligence [16] Company Overview - Cogent Communications is a multinational Internet service provider specializing in high-speed Internet access and data transport services, operating one of the largest Tier 1 IP networks globally [19] - The company offers a range of services including dedicated Internet access, Ethernet transport, wavelength services, and MPLS-based IP Virtual Private Networks [19] - In addition to network connectivity, Cogent provides data center colocation and managed services to support businesses with demanding bandwidth and redundancy requirements [20]

Core Viewpoint - Cogent Communications is implementing a $750 million secured refinancing plan and restructuring to enhance its financial position and collateral for lenders while targeting growth in its wavelength business Financial Structure and Debt - The borrower group has three tranches of debt: $623 million in capital/finance lease obligations, $600 million in secured debt, and $750 million in unsecured debt, with restrictions on secured leverage (no more than 4x) and total leverage (no more than 6x) [1] - Cogent has been a high-yield issuer since 2010, with a structure that includes Cogent Holdings above two subsidiaries: "Group" for operations and high-yield debt, and "Infrastructure" for asset-backed securitized IPv4 leasing with $380 million in ring-fenced debt [2] - The company is currently at 6.6x net leverage and has cut its dividend by 98% from $1.01 to $0.02 per share, with no material equity buybacks planned until leverage reaches 4x [10] Restructuring Plan - The restructuring involves four steps to refinance $750 million of unsecured debt with secured debt, improving the collateral position for bondholders [6][7] - The steps include moving IRU-related liabilities into a subsidiary, splitting leases by geography, selling North America/Western Europe leases to Infrastructure, and leasing back the fiber for 10 years [8] - The new $750 million secured debt will sit pari passu with existing 6.5% secured debt maturing in 2032, with a temporary extension of existing bonds by one year [9] Wavelength Business Growth - Cogent targets a $500 million run-rate in its wavelength business by mid-2028, despite generating approximately $40 million last year, citing a North American total addressable market of about $2 billion [4][15] - The company has expanded its targeted footprint from 800 to 1,096 data centers, delivering Waves to 518 sites and about 200 unique customers, with a year-over-year growth of 100% in the wavelength business [16] Data Center Sale Process - Cogent is in discussions to sell 10 data centers, with buyer interest reportedly exceeding $144 million, to enhance credit for the Group [5][12] - The sale is not required for refinancing, but proceeds will be committed to the Group, with cash trapped subject to restricted payment tests [11] - The primary gating item for the sale is confirmatory due diligence on power availability, with the buyer validating confirmations and conducting environmental work [13]