Abacus Life Repurchases Total of $6 Million of Stock in First 60 Days of Program
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Insights
The announcement by Abacus Life, Inc. regarding their ongoing stock repurchase program is a significant indicator of the company's financial strategy and confidence in its intrinsic value. The repurchase of 553,150 shares at an average price of $10.92, totaling around $6.0 million, suggests that the management believes the shares are undervalued. This buyback can be seen as a move to consolidate ownership, which could potentially increase earnings per share (EPS) and return on equity (ROE) by reducing the number of shares outstanding.
However, investors should consider the opportunity cost of this capital allocation. The funds used for repurchase could have been invested in growth opportunities or used to pay down debt, especially if the company has high leverage. The decision to use cash on hand and future free cash flow is crucial, as it implies that the company is confident in its liquidity and operational efficiency to generate positive cash flow going forward.
It is also important to note that the repurchase program is not an obligation but rather a discretionary activity that can be modified or discontinued at any time. This gives the company flexibility in response to changing market conditions or strategic priorities.
Abacus Life's execution of its stock repurchase program can be interpreted as a message to the market about its self-assessment and future prospects. Stock repurchases often signal to investors that a company's leadership believes its stock is undervalued, which can be a positive sign for potential investors. Additionally, the method of repurchase, whether through open market transactions, block trades, or derivative transactions, can impact the stock's liquidity and volatility.
Market conditions and investor sentiment play a significant role in how such news is received. In a bullish market, a buyback could be seen as a strong positive signal, while in a bearish market, the same action might be interpreted as management trying to support the stock price. The impact of the repurchase on the company's stock price will also depend on the market's perception of the company's growth opportunities and the effectiveness of its long-term strategy.
Abacus Life's adherence to Rule 10b5-1 under the Securities Exchange Act of 1934 is a critical aspect of their stock repurchase program. This rule allows companies to buy back shares at predetermined times and prices, which can help to avoid any potential legal issues related to insider trading. The company's commitment to compliance with state and federal securities laws during this process is essential to maintain investor confidence and corporate governance standards.
Investors should be aware that the repurchase program's terms allow for flexibility in execution, which is legally permissible but requires transparency to ensure that all shareholders are treated fairly. The fact that the program may be suspended or discontinued at any time without prior notice is also a legal safeguard for the company, allowing it to adapt to unforeseen financial or market changes without being bound to complete the repurchase.
ORLANDO, Fla., Feb. 13, 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 February 12, 2024, Abacus has repurchased 553,150] shares of its common stock at an average price of
“We continue to be pleased with our Repurchase Program’s progress,” stated Jay Jackson, Chairman and Chief Executive Officer. “We remain excited at the long-term growth opportunities present for our expert team at Abacus to execute upon and generate additional value creation for 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 groundbreaking new channels: ABL Tech, ABL Wealth, and ABL Longevity Growth and Income 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 20 years, the company has built an institutionalized origination and portfolio management process that is supported by a 100+ 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
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