Megaupload server provider Cogent takes stock hit

Megaupload got shut down on Thursday, but one of the download site"s server operators, Cogent Communications, got hit with its own issues on Friday as a direct result of Megaupload"s problems. Reuters reports that Cogent"s stock price took a tumble in trading, going down as much as 23 percent. The stock price finished the day down by over 18 percent.

Cogent"s Washington DC server locations were searched by FBI agents after Megaupload was shut down and four of its officers were arrested and put in jail in New Zealand. According to the FBI"s indictment, Megaupload paid Cogent as much as $1 million a month to run Megaupload"s servers on Cogent"s network. According to FBR Capital Markets analyst David Dixon, "... as a result, first-quarter revenue could decline sequentially."

Overall, Megaupload leased 36 computer servers in Cogent"s Washington D.C offices along with a server location in France.

Meanwhile, another Reuters story states that someone else is trying to revive Megaupload on their own. The new site uses a different IP address than the real Megaupload site and is based in the Netherlands. Megaupload"s lawyer Ira Rothken said, "We"re not familiar with any official effort at this point to get the site back up in light of the fact that its major servers are in the possession of the United States government and other governments."

Report a problem with article
Next Article

Google to shut down Picnik and more side projects

Previous Article

The ESA pulls its support of SOPA/PIPA ... kind of