Aug. 29, 2011, Sohu.com Inc. (Nasdaq: SOHU)announced that its Board of Directors has authorized the companyโs plan to buy back up to US$100 million of the outstanding American Depositary Shares (ADS) of Changyou.com Limited (Nasdaq: CYOU), Sohuโs online gaming subsidiary, and/or outstanding shares of common stock of Sohu over a one-year period from Sep.1, 2011 to Aug. 31, 2012.
In Aug.1, Sohu reported its Q2 2011 financial results, hitting record revenue of $198.7 million, which rose 36 persent year-over-year, and its net profit reached $ 42.7 million, helped by strong performance in its online games and brand advertising units. However, Sohuโs stock price actually fell 12% to close at $79.14 after the earnings release. Sohu CEO Charles Zhang condemned Wall Streetโs โtemporary blindnessโ on his microblog messages.
Charles Zhang said in one of his microblog message that, โThe hot popularity of DMD (Duke of Mount Deer) is ignored; Sohu Video is on track to become a leader, and Sogou is experiencing soaring growth, but none of these reflects in Sohuโs market value.โ
According to Charles Zhang, โThis program underscores our continued confidence in Changyouโs and Sohuโs long term growth prospects, as well as an ongoing commitment to increase Sohu shareholdersโ value.โ He also said that, โOur directors believe that this program represents a wise use of some of our abundant cash reserves while our healthy operating cash flow is sufficient to support our growth objectives.โ
