Lumen CEO Buys $500K in Stock After 31% Post-Earnings Crash
February 6, 2026 · by Fintool Agent
Lumen Technologies+29.37% CEO Kathleen Johnson stepped in with a $500,000 open-market purchase on Thursday after shares crashed 31% in three trading sessions following the company's Q4 earnings report. The buy—her largest since taking the helm—signals executive conviction at a moment when the market has punished Lumen for soft 2026 guidance despite a massive balance sheet transformation.
Johnson purchased 78,685 shares at an average price of $6.35, bringing her direct ownership to 8.56 million shares. She also holds 3.36 million shares through a spousal trust. The purchase came on the same day Lumen stock hit $6.09—its lowest level since November and nearly 50% below its 52-week high of $11.95.
The Signal: CEO and CFO Both Buying
This isn't a solitary vote of confidence. CFO Christopher Stansbury has made 6 separate purchases totaling $358,000 over the past six months, averaging down consistently as the stock has traded in the $4-8 range.
The pattern is notable: in the past six months, Lumen insiders have made 7 open-market purchases and zero sales. Academic research suggests such insider buying—particularly from CEOs and CFOs using their own money—generates annualized excess returns of 6-8%.
Ask Fintool AI AgentWhy the Crash?
The three-day selloff began after Lumen's February 3 earnings report:
| Metric | Result | Expectation | Beat/Miss |
|---|---|---|---|
| Adjusted EPS | $0.23 | -$0.21 | Beat by $0.44 |
| Q4 Revenue | $3.04B | $3.04B | In-line |
| 2026 Adj. EBITDA Guidance | $3.1-3.3B | $3.37B | Miss |
Despite the massive EPS beat—driven by cost discipline and the AT&T transaction—investors sold aggressively on the below-consensus EBITDA guidance. Revenue declined 8.7% year-over-year as legacy telecom services continue to erode.
The stock fell 6.8% on February 3, then another 9.1% on February 4, before sliding 4.6% on February 5—the day Johnson bought.
The Bull Case: AI Infrastructure Pivot
Lumen's story has fundamentally changed. On February 2, the company closed a transformative $5.75 billion sale of its consumer fiber business to AT&T, using $4.8 billion of proceeds to retire all super-priority debt.
The financial impact is significant:
| Balance Sheet Metric | Before | After |
|---|---|---|
| Total Debt | $18B | <$13B |
| Net Leverage | 5.5x+ | <4x |
| Annual Interest Expense | $900M | $600M |
| Super-Priority Debt | $4.8B | $0 |
CEO Johnson called it "a defining moment for Lumen" on the earnings call. The company is now a pure-play enterprise networking company with $13 billion in pre-funded capacity (PCF) deals signed with hyperscalers building AI data centers.
Management is targeting $700 million in cost savings exiting 2026 and $1 billion exiting 2027. The "grow" segment of enterprise revenue hit 52% of total NA Enterprise revenue in Q4, surpassing legacy segments for the first time.
Ask Fintool AI AgentAnalyst Reactions Split
Wall Street is divided. Following earnings, analyst price targets ranged widely:
| Analyst | Firm | Price Target | Upside |
|---|---|---|---|
| Michael Rollins | Citigroup | $10.00 | +61% |
| Jonathan Atkin | RBC Capital | $8.00 | +28% |
| Michael Ng | Goldman Sachs | $7.25 | +16% |
| Batya Levi | UBS | $6.00 | -4% |
The median analyst target of $7.63 implies 22% upside from current levels. With RSI near 30 (oversold territory) and the CEO buying aggressively, contrarian investors may see an opportunity.
What to Watch
Near-term catalysts:
- Q1 2026 earnings (early May) for first full post-AT&T quarter
- Investor Day details on NaaS platform economics
- Additional PCF deal announcements with hyperscalers
- Cost savings progress toward $700M target
Key risks:
- Legacy revenue erosion continues (-8.7% YoY in Q4)
- AI infrastructure spending pullback could slow PCF deployments
- Execution risk on enterprise pivot
- Competition from private fiber providers
The CEO's $500,000 bet—combined with the CFO's consistent buying—suggests management believes the selloff has overshot. Whether the market agrees will depend on Lumen's ability to convert its AI infrastructure story into visible revenue and cash flow growth.
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