Cogent Schedules $225M Data Center Sale to Reduce 6.7x Leverage
CCOI•Cogent Communications director Lewis Ferguson sold 2,800 shares at $20.36 each, raising $57,008 and retaining 21,094 shares. The company is divesting 10 data centers for $225 million to lower net leverage from 6.7 times after a 19.32% stock drop prompted by a Q1 service revenue decline and investigation.
1. Insider Transaction
Director Lewis Ferguson sold 2,800 shares at $20.36 per share, generating $57,008, and retains 21,094 shares post-sale.
2. Q1 Service Revenue and Stock Reaction
Cogent reported a decline in first-quarter service revenue, triggering a 19.32% stock price drop and prompting an external investigation into business practices.
3. $225M Data Center Divestiture
The company is divesting 10 data centers for $225 million in cash to bolster its balance sheet and fund debt reduction initiatives.
4. Leverage Reduction Strategy
Net leverage rose to 6.7 times following the Sprint asset acquisition, and management aims to return leverage to historical levels near four times through asset sales.
