Lumen Technologies (LUMN) Stock Rallies 29% After CEO’s $500,000 Share Purchase

TLDR

• Lumen CEO Kathleen Johnson bought $500,000 worth of company stock at $6.35 per share on Feb. 5, triggering a 29% jump in share price the next day.
• The purchase followed a 21% stock plunge after Lumen reported a Q4 net loss of $2 million, despite beating analyst expectations on operating profit.
• Johnson now holds nearly 12 million shares worth approximately $96 million, demonstrating strong confidence in the company’s transformation strategy.
• Lumen has secured over $13 billion in deals with tech giants like Microsoft and Meta but carries more than $17 billion in long-term debt.
• Shares climbed from $6.63 to $8.04, giving Johnson a $133,000 paper gain on her purchase within days.

Kathleen Johnson made waves in the market with her wallet. The Lumen Technologies CEO dropped roughly $500,000 on company stock Feb. 5, buying 78,685 shares at an average price of $6.35.

Lumen Technologies, Inc., LUMN

The timing couldn’t have been better. Just one day earlier, Lumen shares had crashed 21% from $8.46 to $6.63. The drop came after the company reported a fourth-quarter net loss of $2 million.

Here’s the twist. Lumen actually crushed analyst expectations. Operating profit hit 23 cents per share, way above Wall Street’s forecast of a 26-cent loss per share.

The selloff likely got swept up in broader market anxiety over artificial intelligence investments. Investors have been questioning whether AI spending will actually pay off.

Johnson’s purchase sent a clear message. She now holds just under 12 million shares between direct holdings and a spousal trust. At Tuesday’s closing price of $8.04, her total stake is worth about $96 million.

Market Response to Insider Buying

The reaction was swift and powerful. Shares rocketed 29% to $8.06 on Feb. 6, the day after the purchase was disclosed. By Friday, the stock was trading around $8.04.

Johnson’s new shares alone gained $133,000 in value within days. A Lumen spokesman emphasized this wasn’t her first open-market purchase. She’s bought company stock before, showing consistent faith in the turnaround story.

The telecom carrier is racing to reinvent itself. Lumen wants to become essential infrastructure for tech giants building AI data centers. The company has inked more than $13 billion worth of contracts with hyperscalers like Microsoft and Meta Platforms.

The Debt Question

The transformation comes with risk. Lumen is carrying more than $17 billion in long-term debt on its books. The big question is whether these new AI-related deals can generate enough profit fast enough to service that debt load.

Johnson’s stock purchase suggests she believes the answer is yes. Her move showed confidence in what the company calls its “long-term strategy” and its shift toward becoming a “digital networking services leader.”

The stock currently trades at just 0.67 times sales. That’s 67 cents for every dollar of revenue. Analysts note this valuation leaves room for upward movement.

Lumen earned a Zacks Rank #1 (Strong Buy) rating. The company also scored an “A” on the Momentum Score, indicating strong price performance. The stock has a beta of 1.51, meaning it tends to move 51% more than the broader market in either direction.

The four-week price change stood at 1.9% following the CEO’s purchase. Over 12 weeks, shares gained 0.9% despite the volatility.

Johnson’s February purchase brought her personal holding to a level that ties her financial future directly to shareholder returns. The CEO’s willingness to buy during a dip after earnings appears to have steadied nervous investors and reversed what could have been a deeper decline.

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