Cogent Communications, most known for their cheap metro ethernet services, nose dived today, down $11.59 a share or 53.39%. Not sure what’s the reason behind this. Cannot say if it has anything to do with their decision to sell more stock, and raise an additional $75 million in a public offering underwritten by Lehman Brothers and others. In March 2005, the company did a 1-for-20 reverse stock split in place and the latest offering will dilute existing shareholder value by about 10 percent, according to Washington Business Journal.
This offering is pretty darn important for Cogent which did $34.4 million in sales in the first quarter of 2005, but managed to lose $14.97 million. Its total operating expenses were $50.11 million, and cash on hand was down to about $21.67 million. Do the math? But that still doesn’t explain what happened to the stock today. Yahoo Message Boards indicate that pricing on the deal – about $20 a share might not be doable. If daily trade volumes are any indicator then someone has been dumping this stock.