Yesterday was a terrible day for insurance stock Globe Life (NYSE:GL), as shares plummeted about 50% in the course of Thursday’s trading. However, it’s making something of a comeback. This morning, it was up about 15%, and though it’s lost some of those gains in the meantime, Globe Life shares are still up nearly 12% in Friday afternoon’s trading.
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Yesterday’s plunge was triggered by reports from a short seller, Fuzzy Panda Research, that alleged that Globe Life was facing a range of insurance fraud cases. Fuzzy Panda’s research noted that there were “hundreds” of reports, but the “extensive allegations of insurance fraud” were simply “ignored by management.”
Among other things, Globe Life had policies written for several people who simply didn’t exist, whether it was that they formerly existed but did not any longer (they were deceased) or they never existed to begin with (they were fictitious). Moreover, Fuzzy Panda’s reports noted that, in some cases, Globe Life employees were using fictitious bank accounts to fund these policies, which allowed them to receive their bonuses.
The Fight Begins
Naturally, Globe Life was not taking this lying down. Globe Life released a statement targeting every one of Fuzzy Panda’s statements, starting with allegations that Fuzzy Panda “…mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory.” Promises of “legal recourse” also followed. However, it’s worth noting here that Fuzzy Panda was the best-performing activist short seller in 2023, according to a Breaking Point report.
What Is the Stock Price Prediction for Globe Life?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GL stock based on four Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 50.44% loss in its share price over the past year, the average GL price target of $133.50 per share implies 145.49% upside potential.
