DENVER, Sept. 3, 2024 /PRNewswire/ -- Lumen Technologies, Inc. (NYSE: LUMN) ("Lumen") announced that it has commenced offers to exchange newly-issued superpriority senior secured notes for certain of its outstanding unsecured senior notes. In addition, Lumen also announced that Level 3 Financing, Inc., its indirect, wholly-owned subsidiary ("Level 3" and, together with Lumen, the "Issuers"), has commenced offers to exchange newly-issued second lien secured notes for certain of its outstanding unsecured seni ...

Core Viewpoint - Lumen Technologies is facing significant skepticism regarding its ability to manage its substantial debt load despite recent AI-related deals, leading to a notable decline in its stock price [1][2][3]. Financial Performance - Lumen's Q2 revenue decreased by 10.7%, with 36% of this decline attributed to divestitures, indicating a high-single-digit decline in its core business [5][6]. - The company reported a free cash flow loss of $156 million in the quarter, with management projecting $1.1 billion in positive free cash flow for the year, of which $700 million is expected from a one-time tax refund [6][7]. Debt Concerns - Lumen has a high debt-to-EBITDA ratio of 4.3 and approximately $18.9 billion in debt and pension liabilities, raising concerns about its financial stability [3][6]. - Hedgeye, a stock-recommendation firm, has advised shorting Lumen due to these debt concerns and the company's declining financial metrics [3][4]. AI-Related Deals - Lumen announced $5 billion in new AI-related deals and an additional $7 billion in AI "opportunities," but skeptics question the significance of these deals in addressing the company's debt issues [4][8]. - The new AI-related Private Connectivity Fabric deal is expected to generate about $1.25 billion in revenue per year over three to four years, but profitability remains uncertain [7][8]. Market Sentiment - The stock has seen a significant drop, down 9.1% on a recent trading day, reflecting broader market fears and skepticism from short-sellers [1][2]. - Investors are advised to approach Lumen with caution, as the turnaround prospects appear uncertain despite the potential for increased network spending on AI [7][8].

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Core Viewpoint - Lumen's stock has experienced significant volatility, with a recent drop of 14.5% attributed to skepticism surrounding its AI opportunities and a short report from Kerrisdale Capital [1][4]. Group 1: Stock Performance - Despite the recent decline, Lumen's stock has increased approximately 195% over the past month due to excitement around its AI initiatives [3]. - The stock ended the trading session down 14.5% on the day of the report [1]. Group 2: AI Opportunities - Lumen has secured around $5 billion in contracts for high-speed fiber services to data centers and claims there could be an additional $7 billion in potential deals [2]. - Kerrisdale Capital argues that the AI contracts will not significantly contribute to Lumen's recovery, citing ongoing declines in the telecom's core business [3][4]. Group 3: Financial Concerns - The company faces a substantial debt load of $19 billion, which raises concerns about its financial health and ability to leverage AI for a turnaround [3]. - Kerrisdale Capital expresses doubt that the recent contract wins will effectively reverse declining sales and margin trends [4][5].

Lumen Technologies Today LUMN Lumen Technologies $6.63 +0.59 (+9.77%) 52-Week Range $0.78 ▼ $7.83 Price Target $3.74 Add to Watchlist Lumen Technologies NYSE: LUMN has experienced skyrocketing share price in the last month, making it one of the top-performing stocks based on total 30-day returns in the area of 323% as of this writing. Earlier this month, Lumen shares topped $6 for the first time since late 2022. All of this momentum has drawn investor attention to this legacy telecommunications infrastructu ...

Lumen Technologies, Inc. (LUMN) has selected Blue Planet, a division of Ciena, for its intelligent automation software to support its strategic network inventory transformation efforts. Enhanced visibility into network inventory through Blue Planet Inventory (BPI) will expedite the creation, development and support of Lumen solutions, such as Network-as-a-Service and the newly introduced Private Connectivity Fabric. Instead of depending on multiple legacy inventory systems that need continuous, expensive an ...

Warren Buffett, the famed Oracle of Omaha and longtime leader of Berkshire Hathaway Inc. NYSE: BRK.B, famously advises investors to "be fearful when others are greedy." It's easy to become swept up in investor excitement about a company, but trying to time the market is notoriously risky. Sometimes, the smartest—and safest—move is to sell shares of a company that seems to be over-hyped. Incidentally, there is no shortage of stocks with a great deal of hype. These three companies offer investors reason for p ...

Lumen Technologies (LUMN) shares have skyrocketed 236% year to date (YTD) compared with the S&P 500 composite and sub-industry's growth of 17.4% and 18.7%, respectively. What Caused the Surge? A string of recent positive developments contributed significantly to the stock price surge. Image Source: Zacks Investment Research On Aug 5, Lumen announced that it has secured $5 billion in new business deals attributed to significant AIfueled connectivity demand. Additionally, the company is actively negotiating w ...

Core Insights - Lumen Technologies has secured a three-year contract valued at over $4.3 million to provide high-speed fiber connectivity to K-12 public schools in New Mexico [1][4] - The initiative aims to connect all schools in New Mexico by 2027, establishing a statewide education network [2] - Lumen's advanced fiber technology will enhance digital inclusivity and educational opportunities for approximately 15,000 students [3][4] Financial Performance - Lumen reported second-quarter revenues of $3.268 billion, reflecting a year-over-year decline of 10.7% due to divestitures and the sale of its CDN business [6] - Despite the revenue decline, Lumen has secured $5 billion in new business driven by AI demand and is negotiating an additional $7 billion in sales [7] Strategic Partnerships and Growth - Lumen signed its largest cable purchase agreement with Corning, securing 10% of Corning's global fiber capacity for the next two years [8] - The company has been selected by Microsoft to enhance its network capacity, supporting next-generation applications [7] Market Performance - Lumen's shares have increased by 269.3% over the past year, significantly outperforming the sub-industry's growth of 48.5% [8]

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...