Why Lumen Stock Plummeted Today

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].