Why a Full Exit From Cogent Communications Amid a 74% Stock Drop Could Matter for Investors
Key Points
Ulysses Management exited its entire stake in Cogent Communications last quarter by selling 335,982 shares.
The shares were previously worth about $12.9 million.
Prior to the sale, this position accounted for 0.9% of the fund’s AUM as of the prior quarter.
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On February 17, 2026, Ulysses Management disclosed in a Securities and Exchange Commission filing that it sold out its position in Cogent Communications (NASDAQ:CCOI).
What happened
According to a Securities and Exchange Commission filing dated February 17, 2026, Ulysses Management completely sold its position in Cogent Communications, offloading 335,982 shares. The fund’s quarter-end valuation for this stake dropped by $12.88 million.
What else to know
- Top five holdings after the filing:
- NASDAQ:MSFT: $69.53 million (18.2% of AUM)
- NASDAQ:AMZN: $59.44 million (15.6% of AUM)
- NASDAQ:HSIC: $50.25 million (13.2% of AUM)
- NYSE:BALL: $29.13 million (7.6% of AUM)
- NASDAQ:TRMB: $27.01 million (7.1% of AUM)
- As of Friday, shares of Cogent Communications were priced at $18.05, down 74% over the past year and well underperforming the S&P 500, which is instead up about 15% in the same period.
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $975.8 million |
| Net income (TTM) | ($182.2 million) |
| Dividend yield | 11.4% |
| Price (as of Friday) | $18.05 |
Company snapshot
- Cogent Communications provides high-speed internet access, private network services, and data center colocation across multiple continents.
- It generates revenue primarily through recurring fees for on-net and off-net connectivity, as well as colocation services supporting bandwidth-intensive organizations.
- The firm targets small and medium-sized businesses, communications service providers, and other professional and enterprise clients requiring robust network infrastructure.
Cogent Communications is a global provider of internet access and network services, operating a substantial fiber infrastructure and data center footprint. The company leverages its extensive on-net building connections and carrier relationships to deliver reliable, high-capacity solutions to enterprise and service provider customers. Its focus on recurring service revenue and broad geographic reach underpin its competitive positioning in the telecommunications sector.
What this transaction means for investors
Based on top holdings, this portfolio focuses on solid players like Microsoft and Amazon, along with reliable firms in healthcare and industrials. And with that in mind, moving away from a struggling telecom company signals a clear preference for businesses that offer better visibility on earnings and stronger pricing power in the current landscape.
Cogent’s strategy has been to provide low-cost bandwidth at scale, but as competition heats up and prices drop, that edge can vanish quickly, and the significant decline in the stock over the past year highlights doubts about the company's capacity to leverage its network into stable, profitable growth.
For long-term investors, the key message isn’t simply to steer clear of beaten-down stocks. It’s vital to assess whether the foundational thesis remains solid. In this scenario, capital is focused on companies with more reliable demand and lower execution risk.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Microsoft. The Motley Fool recommends Trimble. The Motley Fool has a disclosure policy.
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