Multiplan Corp. (MPLN) stock prices were down by 5.53% as of the market closing on August 26th, 2021. This brought the price per share down to USD$5.64 at the end of the trading day. Subsequentcurrent market fluctuations have seen the stock rise by6.82%, bringing it up to USD$6.03.
Share Repurchase Program
August 27th, 2021 saw MPLN stock announce that its Board of Directors had approved a share repurchase program. This authorization will see the company repurchase up to USD$250 million of its Class A common stock from time to time. The repurchasing can take place in the open market transactions at prevailing prices, as well as by other means in accordance with federal securities laws. The repurchase program is effective immediately, with an expiry date of December 31st, 2022. However, the company anticipates completing the repurchasing program before it expires.
Potential of MPLN Stock’s Program
The repurchasing program reflects the strength of the company’s business model and their cash flow. It also demonstrates the confidence of both the senior management team and Board of Directors in a continuation of the company’s strong performance. In light of this confidence, MPLN stock is keen to leverage the attractive opportunity to reacquire its common shares at a discount to their inherent value. This program is consistent with the company’s history of making use of disciplined capital allocation to facilitate significant returns on shareholder investments over the long term.
Funding Repurchasing Program
Purchases of shares will be funded using MPLN stock’s cash on hand, as well as cash from operations. This is supported by the company’s solid liquidity position, which totaled USD$158 million in cash and cash equivalents as of June 30th, 2021. The company expects share repurchases will be funded in part by future cash flow generated by the company’s operations. The majority of cash flow is planned to be allocated towards investments in organic growth initiatives, acquisitions, and debt reduction. Shares that have been repurchased will be held in treasury shares. They will be available for use in connection with MPLN stock’s plans and for other corporate purposes.
Future Outlook for MPLN Stock
The company reported a strong quarter, consolidated by the announcement of its share repurchase program. MPLN stock is keen to leverage the resources at its disposal to usher in organic growth over the long term. Investors are hopeful that this will translate into significant and sustained increases in shareholder value.
