AOL is planning to repurchase $250 million of its outstanding common stock during the next 12 months, the company said in an announcement Thursday.
Before the announcement, AOL was valued at $11.03 per share, down 36% since the company disclosed Q2 2011 earnings Wednesday.
Despite ad revenues being up for the first time since 2008, the company said that ad gains had flattened over the summer and revised its profit expectations downward from the beginning of the quarter.
Investors still aren’t sure that AOL’s efforts to evolve from an Internet subscription service — which, though declining, still makes up a third of the company’s revenues — into an ad-based media company will end profitably.
The announcement has at least succeeded in stemming the stock’s freefall for the short term; AOL shares have since shot up to $11.94 apiece, up 16.44% from the open.
At its present value, $250 million would buy the company more than a fifth of its 106 million outstanding shares. AOL will likely spread out the buyback over the next year, and has reserved the right to suspend or discontinue the repurchase program at any time.
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Posted on Thu, 11 Aug 2011 16:12:04 +0000 at http://feeds.mashable.com/~r/Mashable/~3/7XRLD2Yoi8Q/
Comments: http://mashable.com/2011/08/11/aol-buyback/#comments
Before the announcement, AOL was valued at $11.03 per share, down 36% since the company disclosed Q2 2011 earnings Wednesday.
Despite ad revenues being up for the first time since 2008, the company said that ad gains had flattened over the summer and revised its profit expectations downward from the beginning of the quarter.
Investors still aren’t sure that AOL’s efforts to evolve from an Internet subscription service — which, though declining, still makes up a third of the company’s revenues — into an ad-based media company will end profitably.
The announcement has at least succeeded in stemming the stock’s freefall for the short term; AOL shares have since shot up to $11.94 apiece, up 16.44% from the open.
At its present value, $250 million would buy the company more than a fifth of its 106 million outstanding shares. AOL will likely spread out the buyback over the next year, and has reserved the right to suspend or discontinue the repurchase program at any time.
More About: aol, mediaFor more Business & Marketing coverage:Follow Mashable Business & Marketing on TwitterBecome a Fan on FacebookSubscribe to the Business & Marketing channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Thu, 11 Aug 2011 16:12:04 +0000 at http://feeds.mashable.com/~r/Mashable/~3/7XRLD2Yoi8Q/
Comments: http://mashable.com/2011/08/11/aol-buyback/#comments
