Xinhua Finance Media (XFML-NASDAQ) is coming out in defense of itself after getting trashed by Barron’s this weekend. It has just announced a $50 million share buyback plan after the further drop that was going to be seen after Barron’s came out with a negative article over the weekend.
This is also on the heels of a lawsuit filed against it yesterday and one filed Friday. The Company will buy its shares in the open market and expects the purchases to be funded from existing and future cash reserves. The good news is that the company is still trying to publicly defend itself:
XFMedia Chief Executive Officer Fredy Bush said: "Our business and competitive position in China are as strong as ever. Our Board is so confident of XFMedia’s future that it has authorized the company to repurchase up to $50 million of its own stock, while also taking important steps to continue enhancing our corporate structure and governance. We believe that XFMedia’s stock has been unduly punished in recent days and that buying back shares represents an excellent investment at prevailing price levels — especially in light of our strong first quarter results and positive outlook. We also are pleased that we have available cash to continue pursuing our vision of being the premier Chinese media company. We remain intensely focused on creating value for our shareholders by building world-class businesses in China and adhering to and enhancing applicable standards of corporate governance and transparency."
The company has several more governance initiatives it is announcing:
Committing to having a majority of independent directors on the Boards of both XFL and XFMedia as soon as possible (even though, as a "controlled company" under the relevant securities rules, XFMedia is not required to do so); creating a lead independent director position on the boards of both XFL and XFMedia; Engaging Spencer Stuart, an internationally recognized executive search firm, to identify world-class independent director candidates for the XFL and XFMedia Boards; and Pursuing early compliance with Section 404 of Sarbanes-Oxley at
XFMedia, under the direction and oversight of a new Internal Auditor to be appointed by the Company.
You can read more and more as the press release goes on, but the good news is that the company is still willing to come out swinging in defense rather than just taking punch after punch. Shares had been down almost 5% in pre-market trading indications on the negative press and lawsuits filed, but this action has caused a reversal and shares are actually now up by that 5% at $7.51.
Jon C. Ogg
May 29, 2007
Jon Ogg can be reached at firstname.lastname@example.org; he does not own securities in the companies he covers.