Focus Media Holding Limited (Nasdaq: FMCN), China’s leading multi-platform digital media company, today announced that its board of directors has approved a share repurchase program. Under the terms of the approved program, Focus Media may repurchase up to US$100 million worth of its issued and outstanding American depositary shares (“ADSs”). The repurchases will be made from time to time on the open market at prevailing market prices or in block trades. The purchases will be made subject to restrictions relating to volume, price and timing. The timing and extent of any purchases will depend upon market conditions, the trading price of its ADSs and other factors. Focus Media expects to implement this share repurchase program over the course of the next 12 months, effective immediately, in a manner consistent with market conditions and the interest of the shareholders. Focus Media’s board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size accordingly. Focus Media plans to fund repurchases made under this program from its available cash balance.
Bill wrote about Focus Media a few months ago at digital signage news, suggesting that (while he's not a financial planner, and thus not qualified to give financial advice) it would seem that Focus Media's stock price undervalues it to a fair degree. That has continued to be true (assuming it was true to begin with, of course), especially in light of their strong performance in every sector where they're not currently fighting the Communist government.
Typically share repurchases take place when financially strong companies feel that their share price is low enough that the best use of their capital is to reduce the number of shares floating on the public market. Considering the amount of cash that Focus has in the bank and their presumed strength, it seems like a smart move on their part, and perhaps an indication to the rest of us.