Baidu Shares Jump After Announcement of Massive Stock Buyback
China’s leading search engine company, Baidu Inc. (NASDAQ: BIDU), announced a massive share buyback Wednesday. The company said its board approved a plan to buy back up to $1 billion of its shares, with repurchases taking place over the next 12 months.
The company stated in the press release that the proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations
The Chinese tech giant provides more than 40 products and services, including an online map. It also distributes products and services via a direct sales force, distributors and affiliate networks. In addition, Baidu also owns subsidiaries that have exposure in mobile app stores, video, fintech and groupbuy.
Shares have been on fire, having risen about 40% in the past year. They closed at $250.77 on Tuesday and traded at $255.80 in premarket action Wednesday. The company said in the press release that its board would review the share repurchase program periodically and may adjust its terms and size.
The current stock repurchase plan compares with a similar plan the company announced in July of 2015 when it adopted a $1 billion share repurchase program after the stock got hit with some extremely hard selling. Many of the top Chinese technology stocks have been extremely volatile over the past month as worries over the potential for a trade war with the United States have rattled investors.