Cogent (NASDAQ:CCOI) Plunges 14.29% as 98% Dividend Cut Fuels Deleveraging Push

On November 20, 2025, Cogent Communications (NASDAQ:CCOI) plunged 14.29% in pre-market trading following a strategic update at Wells Fargo’s TMT Summit. The telecom firm announced a 98% dividend cut to $0.02 per share, aiming to reduce net leverage from 6.6x to 4.0x, while accelerating its buyback program and integrating the acquired Sprint assets. CEO Dave Schaeffer emphasized deleveraging as a priority despite the Sprint acquisition dragging down EBITDA margins to -80% and contributing 30% of combined revenue.

Key operational shifts include targeting a $500 million annual run rate in wavelength services by 2028 and exploring sales or leases for 24 non-core data centers, two of which have signed Letters of Intent. The IPv4 leasing business now generates $70 million annually. However, Sprint’s declining revenue—down 24.2% over nine quarters—highlights integration challenges, with customer confidence in the wavelength segment improving but backlog issues persisting.

The stock’s sharp decline reflects investor concerns over Sprint’s drag on earnings and the aggressive deleveraging strategy. While CCOI aims to boost core business growth and capture 25% of the wavelength market, the dividend reduction and asset divestitures signal short-term financial strain. Analysts note the company’s focus on buybacks and strategic repositioning could stabilize long-term value, but near-term volatility remains likely as integration hurdles and market share gains unfold.

Backtest assumptions suggest a momentum-driven strategy targeting CCOI’s wavelength growth and buyback program could outperform over 12-24 months. However, risks include prolonged Sprint integration delays and soft demand in non-core assets. A $500 million wavelength run rate by 2028 would require 25% annual growth from current levels, aligning with broader telecom infrastructure trends but demanding execution discipline.