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Thread: Cogent Stock in a FREEFALL
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05-24-2004, 04:16 PM #1Registered User
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Cogent Stock in a FREEFALL
Stock is at 34 cents a share, are they going to be around in 6 months?
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05-24-2004, 04:21 PM #2THE Web Hosting Master
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From what I heard the stock has laregely been decreasing due to the announced 1/20 reverse split and the annuncement that they're going to issue $75 million more worth of stock. That could be taken as a desperate measure for a company in need of cash, or it could have just been their plan. I would still never consider signing a long term contract with them and would never consider single-homing with them.
Note: Them saying they'll issue $75 million in stock would be enough to drive the current stock prices down as the current market cap is just over $4 million, issuing another $75 million will basically mean current stock holders don't own much of anything anymore.Karl Zimmerman - Founder & CEO of Steadfast
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05-24-2004, 06:25 PM #3Web Hosting Master
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I'm not too sure exactly about what's going on with Cogent. But Cisco owns a huge sum of stock in Cogent. That might be a factor perhaps. Either Cogent is doing something spectacular (which i doubt) or they're doing something drastic, which means they could be going out of business in the near future. If they go out of business, problems could arise on the internet. Cogent plays a huge role in the internet so i'm not sure if they'll be bought out by someone or just their lines and customers would be taken.
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05-24-2004, 08:00 PM #4Web Hosting Master
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Yeah definetly someone would pick up their clients if they went under. Wiltel would be one of my guesses if it happends.
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05-24-2004, 09:38 PM #5Registered User
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The stock closed at .30 cents today.
From the yahoo message board;
Price is getting interesting
by: josmitty380 05/21/04 11:36 pm
Msg: 2522 of 2533
The price is getting interesting. At 35 cents per share, the current market capitalization of 514 million shares (500 million from converting preferred stock, 14 million current common) would be 180 M$. The proposed stock offering would take this to 180+75=255 M$, which represents a 30% devaluation of the actual stock (preferred + current common).
One of the major investors in Cogent expects sales of 100 M$ this year. See this link (replace * by .)
www*globes*co*il/serveen/globes/DocView.asp?did=798610&fid=1724
Is 255 M$ a reasonable price for 100 M$ in sales? It all depends on what you think of Cogent's prospects. It is a VERY bold effort to create value from the ruins of past failures, and I think their approach really has a chance to succeed. A capitalization/sales ratio of 2.5 certainly isn't rare for a speculative tech stock.
I just wish I could have bought in at the price that the preferred stock holders paid (in a relatively recent deal, Cogent got 2.5 M$ for 14 million shares of preferred (3.5% of the company at that time) -- that deal valued Cogent at around 70 M$. Note that these investors win big if the stock price holds, and win even if the price drops to 20 cents per share.
However, if the price continues to drop to 20 cents or even lower, the dilution from the proposed 75 M$ stock offering would become important (about 40% dilution at 20 cents / share, about 50% dilution at 15 cents / share). I wonder if the preferred investors, who control all the seats on the board, would allow the full stock offering to proceed in this case.
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05-25-2004, 05:03 AM #6Junior Guru
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Hm.....I wonder if anyone here actually has cogent stocks
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05-25-2004, 08:11 AM #7Registered User
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I am thinking of buying it at .16 cents.
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05-25-2004, 08:51 PM #8Backup Guru
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I wouldn't worry about the stock price. Cogent seems to be surviving just fine. But my advice has always been not to rely on a single provider for connectivity.
Scott Burns, President
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05-26-2004, 12:43 AM #9CISSP-ISSMP, CISA
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COI is at a 52-week low and is holding at $0.30 (last trade of the day on 5/25 according to E*TRADE), my humble reccomedation is to buy (as I will be doing when the markets open tomorrow). They have recovered from stock plunges, and I have faith that they'll do it again.
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05-26-2004, 05:42 AM #10Newbie
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It always gets worse before it gets better
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05-26-2004, 09:05 AM #11Web Hosting Master
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the reverse split is done to prevent them from becoming a penny stock. with that said, i'm pretty sure the investors will keep them afloat. cogent investors are like poker players who had a 56s in the pocket, called and came up empty on the flop - protecting their stake, nothing more and nothing less.
as far as long term contracts, those always have weasel clauses that allow you to back out should the provider go tits up. since karl never signed a contract with a carrier, he doesn't know that =]
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05-26-2004, 09:51 AM #12CISSP-ISSMP, CISA
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Market isn't moving too quickly this morning, my BUY order for COI was pending for about 12 min before it was successfully executed.
Wish me luck
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05-26-2004, 10:40 AM #13Registered User
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Good Luck
yahoo -- finance --- "message board COI" has some very interesting reading.
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05-26-2004, 01:57 PM #14THE Web Hosting Master
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Originally posted by rusko
the reverse split is done to prevent them from becoming a penny stock. with that said, i'm pretty sure the investors will keep them afloat. cogent investors are like poker players who had a 56s in the pocket, called and came up empty on the flop - protecting their stake, nothing more and nothing less.
as far as long term contracts, those always have weasel clauses that allow you to back out should the provider go tits up. since karl never signed a contract with a carrier, he doesn't know that =]
paul
I was basically meaning signing a long term deal with them as meaning putting all your eggs in one basket, expecting them to be your sole long-term answer.Karl Zimmerman - Founder & CEO of Steadfast
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05-26-2004, 06:24 PM #15Web Hosting Master
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Originally posted by rusko
cogent investors are like poker players who had a 56s in the pocket, called and came up empty on the flop - protecting their stake, nothing more and nothing less.
I would never buy their stock in the $.30 range (well, with a large amount of cash anyway). I can't remember who said it, but the price in teens is what I am waiting for. But what do I know? I have had some brilliant moves that once I made my cash on I thought I should write book about it, but right before that would happen I would turn around and do something so stupid a monkey could have made more money. Network Engines anyone?BeDifferentSolutions | "For when Indian-based solutions just won't do."
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05-27-2004, 04:58 AM #16Web Hosting Master
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Originally posted by UmBillyCord
Ahhh... so what you are saying is that they 'have nothing' and are now bluffing or praying for a great turn and river card for a runner-runner winner?
if you ever see a bad player at a play money game, he will continue calling after he's failed to fold in the first round, because the prospect of losing his stake now seems much worse than losing his current stake plus whatever it takes to drown in the river. and so, they continue calling and the proficient players suck their chips in like a morally deficient young lady in a crackwhore/japanese tourist metaphor.
do something so stupid a monkey could have made more money.
i can read the headlines on the blogs right now: 'emergent internet phenomenon - flashmob of monkeys and other webloggers come together for a poo flinging meetup(.com)'
paulLast edited by rusko; 05-27-2004 at 05:02 AM.
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05-27-2004, 08:37 PM #17CISSP-ISSMP, CISA
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Originally posted by UmBillyCord
Ahhh... so what you are saying is that they 'have nothing' and are now bluffing or praying for a great turn and river card for a runner-runner winner?
I would never buy their stock in the $.30 range (well, with a large amount of cash anyway). I can't remember who said it, but the price in teens is what I am waiting for. But what do I know? I have had some brilliant moves that once I made my cash on I thought I should write book about it, but right before that would happen I would turn around and do something so stupid a monkey could have made more money. Network Engines anyone?
I won a limit order at $0.30 yesterday morning. To this day I have never realized a stock market loss *knock on wood*. My current holdings are now Cogent and CapitalOne Financial Corp. Previous holdings include Savvis, Genta (bailed out before the crash), Comcast, Gilead Sciences, and a few others.
I no longer work in the financial services industry, and am by no means qualified to make personal reccomendations. Nonetheless, as you can see here I definately felt it a strong move to buy in at $0.30 and if the opportunity still existed, I would most likely do it again.
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05-28-2004, 01:32 AM #18Web Hosting Master
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Originally posted by DeathNova
From what I can tell, you're not going to have an opportunity to buy in the $0.30 range . The past two days have shown considerable gain, with the most recent bid sitting at $0.39.
I won a limit order at $0.30 yesterday morning. To this day I have never realized a stock market loss *knock on wood*. My current holdings are now Cogent and CapitalOne Financial Corp. Previous holdings include Savvis, Genta (bailed out before the crash), Comcast, Gilead Sciences, and a few others.
I no longer work in the financial services industry, and am by no means qualified to make personal reccomendations. Nonetheless, as you can see here I definately felt it a strong move to buy in at $0.30 and if the opportunity still existed, I would most likely do it again.
COF was a 'winner-winner, chicken dinner' for me. I took profit of those gains. I hold CMCSA right now. Bought in April and am patiently waiting for its rise.BeDifferentSolutions | "For when Indian-based solutions just won't do."
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05-28-2004, 01:46 AM #19THE Web Hosting Master
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Best stock move I ever made was buying GeoCities stock before they got bought out by Yahoo!, went from about $15 a share to $120 in no-time. Then yahoo! stock did pretty well itself. Made a killing on that one. I knew the buy-out was extremely likely, but it dodn't seem anyone else did.
Karl Zimmerman - Founder & CEO of Steadfast
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05-28-2004, 01:52 AM #20CISSP-ISSMP, CISA
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I was holding CMCSK actually. I'm not following you regarding the COF though. A lot of people lost millions in that company. I bought a boatload at ~57 and another boatload around ~28. Both were sold at significant gains (last bid was 69.99)
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05-28-2004, 02:43 AM #21Web Hosting Master
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Originally posted by DeathNova
I was holding CMCSK actually. I'm not following you regarding the COF though. A lot of people lost millions in that company. I bought a boatload at ~57 and another boatload around ~28. Both were sold at significant gains (last bid was 69.99)
I do not hold stocks for long periods. I am still fairly young, so a lost will not kill me. In fact COF was probably one of the longest running stocks I owned in one 'setting' - without selling and buying back for example.BeDifferentSolutions | "For when Indian-based solutions just won't do."
*We hire, train and manage extremely skilled technical support employees for your business*
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05-29-2004, 01:46 AM #22Web Hosting Evangelist
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Cogent, as much as we might hate/love/don't care about them, isn't going anywhere... Cisco's has too much money in them to let it fail...
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05-29-2004, 01:59 AM #23Web Hosting Master
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it is not up to cisco, it is up to the market and the management of cogent. rest assured that if cogent requires further cash injections and cisco shareholders cry foul, none will be forthcoming from cisco. remember that cogent's big thing was MANs and FTTx, which has been failing consistently and spectacularly not just for cogent but also for others who have been trying to do the same thing, eg yipes.
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06-04-2004, 01:26 AM #24Newbie
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I recommend to avoid Cogent stock and use of their network.
When you issues more stocks, it will increase the supply.
The current stocks will fall.
Anyway, what can $75 millions do for a nationwide network?
Cogent can burn that $75 million quickly.
Other provders like Level 3 are very agressive now.
Cogent will loose more and more customers.
When your stocks are in water, you cannot keep good employees.
You will have support problems if you use their network services.
My advise: run away, run fast from Cogent!!!!!!!!1Network Guru
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06-04-2004, 07:12 AM #25CISSP-ISSMP, CISA
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networkguru:
I guess it goes without saying that you're qualified in various fields (as per your signature), but what position are you in to make financial reccomendations? I purchased COI on its 52-week low maybe a week ago, and thus far have an unrealized gain of over 30%. Their recent reverse split was successful in increasing EPS, with most firms reccomending "Buy" or "Hold." Its important to remember that a stock is not valued based on how many customers that company has (or how many customers its competitors are gaining), but how much the public is willing to pay.