The lawsuit targets the period between February 29, 2024, and May 1, 2026, challenging claims that the company’s wavelength backlog served as a reliable indicator of future revenue. According to the complaint, these figures were illusory, as many customers lacked the intent or ability to accept delivery of the services. The firm alleges that Cogent management knowingly misrepresented demand for its optical offerings to inflate the stock's perceived value.
Market skepticism intensified significantly starting in February 2025, when Cogent reported a 20% sequential decline in its backlog and purged 1,500 stale orders. Subsequent quarters saw management admitting that large portions of their sales funnel failed to materialize into revenue. By February 2026, the company abruptly stopped reporting backlog data altogether. Reed Kathrein, the partner leading the investigation, stated the firm is examining whether leadership intentionally promoted these metrics to distort the company's true financial health. Investors who sustained significant losses during the class period are being urged to submit their claims through Hagens Berman’s portal.
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