After a 65% Slide, One Fund Clears Out This Internet Infrastructure Stock Entirely

Company Overview - Cogent Communications Holdings is a global provider of internet access and network services, operating 54 data centers and connecting thousands of commercial buildings [6] - The company focuses on recurring service revenue and has a broad geographic reach, which underpins its competitive position in the telecommunications sector [6] - Revenue for the trailing twelve months (TTM) is $987.53 million, with a net income of -$194.71 million, and a dividend yield of 12.6% [4] Recent Developments - Taylor Frigon Capital Management fully exited its position in Cogent Communications Holdings in the fourth quarter, selling 73,271 shares valued at approximately $2.81 million [1][2] - As of January 23, shares of Cogent were priced at $24.29, reflecting a significant decline of 65.4% over the prior year, underperforming the S&P 500's gain of roughly 14% during the same period [3] Financial Performance - Cogent's latest results indicated some progress, with wavelength revenue increasing sharply year over year and EBITDA growing, leading to margins expanding to just over 20% in the third quarter [11] - However, core service revenue experienced a sequential decline, operating cash flow remained thin, and the stock continued to slide, indicating investor skepticism about the company's ability to generate durable free cash flow [11] Market Position and Strategy - Cogent operates a network-centric business model, generating income through recurring service contracts and colocation fees for bandwidth-intensive organizations [9] - The company serves small and medium-sized businesses, communications service providers, and enterprises that require reliable, high-capacity data connectivity [9] - The exit by Taylor Frigon Capital Management reflects a growing mismatch between the demands of Cogent's business and the portfolio's design, highlighting the challenges faced by capital-heavy network operators [10][12]