NetEase Doubles Share Repurchase Amount; Stock Up 4%
The stock of the Chinese game content provider jumped nearly 4 percent Monday on news that its share repurchase program went up another $1 billion.
(Updated with closing stock price)
Shares of NetEase, Inc. (Nasdaq: NTES) jumped nearly 4 percent on Monday after the company, a top internet and online game services provider in China, announced it would repurchase up to another $1 billion in American depositary shares.
With this announcement, the company amended its previous repurchase program initiated in November, bringing the overall potential repurchase to $2 billion over the next 12 months.
News of the repurchase increase sent the stock of the company to $253.20 per share, up $9.62 on Monday.
For the past two quarters, income at the Beijing-based company has been sliding on soaring expenses, with the first three months this year down 81 percent from a year ago, and the fourth quarter 65 percent lower than the year before. The management of NetEase, however, has been optimistic about its future growth.
"We are excited by the longevity of and player loyalty to our flagship games, the strong performances of our new titles launched in the first quarter, and the continued rapid expansion of our e-commerce business, as well as the healthy development of our advertising services," William Ding, the chief executive officer of NetEase, said in a statement in May.
As of the end of March, the company said it had repurchased about 1.2 million ADSs for $376 million since its November announcement.
NetEase said it is planning to fund repurchases from available working capital. The company had $5.7 billion in working capital as of March 31.
The stock of NetEase closed at $253.20 per share, up nearly 4 percent after the company announced an increase to its share repurchase program.