red violet Announces Additional $5 Million Share Repurchase Authorization
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An additional $5.0 million stock repurchase authorization by Red Violet, Inc. reflects the company's strong cash flow position and its management's confidence in the intrinsic value of the company. Such a buyback can be accretive to earnings per share by reducing the number of shares outstanding, potentially leading to a higher stock price if market conditions do not change. However, investors should consider the opportunity cost of this capital allocation decision. Instead of repurchasing shares, the company could have invested in growth opportunities or paid down debt, if any.
It is notable that the company has been active in repurchasing its shares, with $4.5 million already spent at a weighted average price of $18.78, which is below the current repurchase price of $19.97. This indicates a positive trend in the company's stock price over the period. The lack of a minimum purchase requirement and the absence of an expiration date provide the company with flexibility in managing the program.
Share repurchase programs are often perceived positively in the market as they suggest that a company believes its stock is undervalued. Red Violet's consistent buyback activity, combined with a focus on innovation investment, may signal to investors that the company is balancing returning capital to shareholders with the pursuit of future growth. The impact of such programs on the actual stock performance can vary based on broader market trends and the company's future earnings.
Moreover, the repurchase strategy should be evaluated within the context of the analytics and information solutions industry. If Red Violet is repurchasing shares while competitors are investing heavily in new technologies or market expansion, it could impact Red Violet's competitive positioning in the long term.
From a governance perspective, the decision by Red Violet's Board of Directors to authorize a stock repurchase program demonstrates a commitment to shareholder interests. However, the discretionary nature of the program means that the actual execution will depend on market conditions and the company's evaluation of alternative uses of cash. Stakeholders should monitor the company's disclosures regarding repurchases to ensure that the buybacks are executed in a manner that aligns with long-term value creation.
Additionally, the use of Rule 10b5-1 trading plans can mitigate insider trading concerns, as it allows the company to repurchase its own shares at predetermined times and prices, regardless of any subsequent material non-public information the company may receive.
BOCA RATON, Fla., Dec. 20, 2023 (GLOBE NEWSWIRE) -- Red Violet, Inc. (NASDAQ: RDVT), a leading analytics and information solutions provider, today announced that on December 19, 2023, its Board of Directors authorized the repurchase of an additional
The authorization is effective immediately and is additive to the previous
“With continued confidence in our business, our pipeline, and our ability to deliver strong free cash flow, the Board of Directors and management team believe that the Company’s share repurchase program, in combination with the Company’s continued investment in innovation, is an important component of delivering shareholder value,” stated Derek Dubner, red violet’s Chairman and CEO.
Under the Company’s share repurchase program, the Company may purchase shares on a discretionary basis from time to time through open market purchases, private transactions or other means, including through Rule 10b5-1 trading plans. The timing and amount of any transactions will be subject to the discretion of the Company based upon prevailing market conditions and other opportunities that the Company may have for the use or investment of its cash balances. The repurchase program has no expiration date, does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice.
About red violet®
At red violet, we build proprietary technologies and apply analytical capabilities to deliver identity intelligence. Our technology powers critical solutions, which empower organizations to operate with confidence. Our solutions enable the real-time identification and location of people, businesses, assets and their interrelationships. These solutions are used for purposes including risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. Our intelligent platform, CORE™, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. Our solutions are used today to enable frictionless commerce, to ensure safety, and to reduce fraud and the concomitant expense borne by society. For more information, please visit www.redviolet.com.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipate," "believes," "should," "intends," "estimates," and other words of similar meaning. Such forward looking statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations, including whether the Company’s share repurchase program, in combination with the Company’s continued investment in innovation will be an important component of delivering shareholder value. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed above together with the additional factors under the heading "Forward-Looking Statements" and "Risk Factors" in red violet's Form 10-K for the year ended December 31, 2022 filed on March 8, 2023, as may be supplemented or amended by the Company's other SEC filings. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Company Contact:
Camilo Ramirez
Red Violet, Inc.
561-757-4500
ir@redviolet.com
Investor Relations Contacts:
Steven Hooser/Phillip Kupper
Three Part Advisors
214-872-2710
ir@redviolet.com
FAQ
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