In the aftermath of its earnings report, Lumen Technologies Inc. witnessed a significant drop in its stock price. However, the company's CEO, Kate Johnson, has been actively purchasing shares.
CEO Kate Johnson acquired 1 million Lumen shares on Thursday at an average price of 97 cents, amounting to a $970,000 investment. This purchase was disclosed in a filing with the Securities and Exchange Commission on Friday.
Kate Johnson's buying activity followed a historic decline in Lumen shares on Wednesday, where the stock plummeted by 32.9% to 98 cents, marking its largest single-day percentage decline ever. On Thursday, the day of Johnson's purchase, shares dipped as low as 78 cents but closed at $1.06. The stock also saw some recovery on Friday, closing the week at $1.12.
With this recent stock acquisition, Kate Johnson now directly owns over 5.1 million Lumen shares, as indicated in the filing released on Friday.
A spokesperson for Lumen commented on Kate's purchase, stating that it reflects her confidence in the long-term potential of Lumen and her dedication to the company's success.
Kate Johnson assumed the role of Lumen's CEO approximately a year ago and has been tasked with orchestrating a turnaround for the company, which offers services such as networking and cloud storage. Over the past year, Lumen's shares have experienced an 81% decline, and over the past two years, they have fallen by 91%.
Earlier this week, the company, previously known as CenturyLink, announced a new credit agreement and revealed plans to reduce investments in fiber and workforce.
Despite these efforts, analysts remain cautious about the company's transition. JPMorgan's Philip Cusick, for instance, expressed skepticism, citing the pressure on fundamentals in 2023 and 2024 due to years of underinvestment in the enterprise asset base and increasing competition from other providers. He rates the stock as underweight.
MoffettNathanson's Nick Del Deo also highlighted concerns about revenue pressures and emphasized the importance of improving the top-line performance for a successful turnaround. He maintains his sell rating with a $1 target.
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