Today, investors in Lumen Technologies (NYSE:LUMN) and LUMN stock are seeing some action. This move comes amid a period of relative consolidation for this stock. Indeed, Lumen is a company that’s traded sideways for some time. Many investors may thus be intrigued to see why.
After all, Lumen is a company operating in a rather “boring” sector. Formerly CenturyLink, Lumen’s fiber optic network is a key piece in the technological fabric of America. In fact, this company’s operations span more than 60 countries, making Lumen a driving force behind technological innovation domestically — and abroad.
Many investors have been gravitating toward Lumen due to its rather cheap valuation and sky-high dividend yield. Currently, shares of LUMN stock provide a yield of 7.3%. Additionally, Lumen remains a high-leverage play on government spending and an economic resurgence. Famed investors such as Michael Burry have even recently stepped behind this fiber play.
Let’s dive into why LUMN stock is on the move today.
LUMN Stock Moves on News of Potential Asset Sales
Today, LUMN stock got a boost from reports the company is in talks to sell off some of its non-core assets. According to reports, Apollo Global Management is the potential suitor.
On the company’s most recent earnings call, CEO Jeff Storey had some interesting comments. He stated that the company has been “actively looking at selling non-core assets to unlock value in our business.”
Indeed, it appears the company is making good on its search for buyers of its non-core assets. Among the assets analysts believe could be on the table are related to the company’s consumer business.
What ultimately comes of these talks remains to be seen. However, the purported valuation of the assets being discussed is around $5 billion. Those close to the deal suggest something may be formally announced in the coming weeks. That said, it appears talks are early, and it’s possible a deal may fall through.
For shareholders in LUMN stock, any indication the company is looking to create shareholder value is a good thing. Accordingly, for those who believe in its management team and their ability to create excess value, these talks are good.
However, without any formal details on what’s being discussed, a significant amount of speculation is being factored into LUMN stock right now. Accordingly, investors ought to remain cautious with this name over the weeks to come.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
