Abacus Life Repurchases $1.9 Million of Stock in First 30 Days of Program
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Insights
The announcement by Abacus Life, Inc. regarding the execution of its stock repurchase program is a clear indicator of the company's financial strategy and confidence in its intrinsic value. The repurchase of shares at an average price below the current market value can be a signal to the market of undervaluation, potentially leading to a positive reassessment of the stock by investors. With $13.1 million still available for future repurchases, the program could provide ongoing support for the stock price, assuming the market conditions and the company's financial performance do not deteriorate.
Moreover, the funding of the repurchases through cash on hand and expected free cash flow suggests a strong liquidity position and operational efficiency that is generating sufficient cash for such capital return initiatives. This could be reassuring for investors concerned about the company's cash management and long-term financial health. However, investors should also consider the opportunity cost of the repurchase program, as the funds used for buybacks are not being invested in potential growth opportunities or other strategic initiatives.
Abacus Life's focus on the life insurance policy market and its investment in technology and data analytics positions it within a niche but growing segment of the financial services industry. The company's strategic growth initiatives, as mentioned by the CEO, likely involve leveraging its technological edge to optimize the valuation and management of life insurance policies. This could result in a competitive advantage and, if successfully executed, might lead to increased market share and profitability.
However, the effectiveness of stock repurchase programs in alternative asset management firms like Abacus Life depends heavily on market perception and the execution of underlying business strategies. Investors should monitor the company's future earnings and cash flow statements to assess the sustainability of its repurchase program and its impact on earnings per share. Additionally, the alternative asset management sector is subject to regulatory changes, which could affect the company's operations and, consequently, the attractiveness of its stock repurchase program.
The timing and scale of Abacus Life's stock repurchase program are influenced by broader economic conditions, including interest rates, market liquidity and economic growth forecasts. In a low-interest-rate environment, buybacks can be more attractive as borrowing costs are lower and alternative investments yield less. However, should interest rates rise or market liquidity tighten, the company may face higher costs of capital, which could impact the feasibility and desirability of continuing the repurchase program.
Furthermore, repurchasing shares during economic downturns can be risky if the company's revenues are negatively impacted, leading to a need for cash reserves to fund operations rather than buybacks. Conversely, executing buybacks during economic upswings can enhance shareholder value by signaling confidence in the company's financial strength and future prospects. Investors should therefore contextualize Abacus Life's repurchase program within the larger economic landscape to gauge its potential impact on shareholder value.
ORLANDO, Fla., Jan. 09, 2024 (GLOBE NEWSWIRE) -- Abacus Life, Inc. (NASDAQ: ABL) (“Abacus” or the “Company”), a leading buyer of life insurance policies and vertically integrated alternative asset manager specializing in specialty insurance products, provided an update to its
From the commencement of the Repurchase Program through January 8, 2024, Abacus has repurchased 206,050 shares of its common stock at an average price of
“We are pleased with the progress of our Repurchase Program, which reflects our continued belief in the quality of our business and the substantial opportunities ahead at Abacus for future long-term value creation,” stated Jay Jackson, Chairman and Chief Executive Officer. “We believe our expert team, wealth of data and innovative technology continue to position us well to further execute on our strategic growth initiatives, generate sustained profitability, and ultimately create long-term value for our stockholders.”
During the pendency of the stock repurchase program, the Company may repurchase shares from time to time through various methods, including in open market transactions, block trades, accelerated share repurchases, privately negotiated transactions, derivative transactions or otherwise, certain of which may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in compliance with applicable state and federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including our assessment of the intrinsic value of the Company's common stock, the market price of the Company's common stock, general market and economic conditions, available liquidity, compliance with the Company's debt and other agreements, applicable legal requirements, the nature of other investment opportunities available to the Company, and other considerations. The Company is not obligated to purchase any shares under the repurchase program, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases by using cash on hand and expected free cash flow to be generated in the future.
Forward-Looking Statements
All statements in this press release (and oral statements made regarding the subjects of this press release) other than historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors that could cause actual results to differ materially from such statements, many of which are outside the control of Abacus. Forward-looking information includes but is not limited to statements regarding: Abacus’s financial and operational outlook; Abacus’s operational and financial strategies, including planned growth initiatives and the benefits thereof, Abacus’s ability to successfully effect those strategies, and the expected results therefrom. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “expect,” ”intend,” “anticipate,” “goals,” “prospects,” “will,” “would,” “will continue,” “will likely result,” and similar expressions (including the negative versions of such words or expressions).
While Abacus believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. The factors that could cause results to differ materially from those indicated by such forward-looking statements include, but are not limited to: the impact of the stock repurchase plan on the trading price, volume and public float of the Company’s common stock and the trading price and exercise of the Company’s warrants exercisable for shares of the Company’s common stock; the fact that Abacus’s loss reserves are bases on estimates and may be inadequate to cover its actual losses; the failure to properly price Abacus’s insurance policies; the geographic concentration of Abacus’s business; the cyclical nature of Abacus’s industry; the impact of regulation on Abacus’s business; the effects of competition on Abacus’s business; the failure of Abacus’s relationships with independent agencies; the failure to meet Abacus’s investment objectives; the inability to raise capital on favorable terms or at all; the effects of acts of terrorism; and the effectiveness of Abacus’s control environment, including the identification of control deficiencies.
These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties set forth in documents filed by Abacus with the U.S. Securities and Exchange Commission from time to time, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and subsequent periodic and current reports. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Abacus cautions you not to place undue reliance on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Abacus assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Abacus does not give any assurance that it will achieve its expectations.
About Abacus
Abacus is a leading vertically integrated alternative asset manager and market maker, specializing in longevity and actuarial technology. The company is democratizing the life insurance space through three groundbreaking new channels: ABL Tech, ABL Wealth, and ABL Longevity Funds. Since 2004, Abacus has purchased life insurance policies from consumers seeking liquidity and has actively managed those policies over time (via trading, holding, and/or servicing). With over
Over the past 19 years, the company has built an institutionalized origination and portfolio management process that is supported by a 95+ person team, long-term relationships with 78 institutional partners and 30,000 financial advisors, and the ability to operate in 49 states. The Company complies with HIPAA and privacy laws to maintain and protect confidentiality of financial, health, and medical information. Abacus is also proud to be a BBB Accredited Business with an A+ rating.
Contact:
Abacus Life Investor Relations
investors@abacuslife.com
Abacus Life Public Relations
press@abacuslife.com
FAQ
What is the update provided by Abacus Life, Inc. (NASDAQ: ABL)?
When does the Repurchase Program expire?
How does the Chairman and CEO, Jay Jackson, feel about the company's progress?
How does the company plan to fund the repurchases?
