After announcing shrinking profits and watching its stock price plunge, The9 enacts plans to purchase $50 million of its stock off the open markets.
In response to the dramatic drop seen in the company's stock price following its quarterly report, Chinese game operator The9 Limited (NCTY) has authorized a stock buy-back plan to purchase $50 million worth of its American Depositary Shares, each of which represents one share of common stock. Shares will be purchased in the open market and paid for with money in The9's existing cash reserves.
Jun Zhu, Chairman and Chief Executive Officer of The9, stated, "Our business and competitive position in China continue to be strong and therefore we are confident of the company's future performance. We think that the current shares price level do not reflect the company's value and potential. Mirroring this confidence, our board of directors has authorized the company to repurchase up to $50 million of its own stock. We believe that this is a good investment opportunity for the company to repurchase its own shares at the prevailing price level."