Baidu Inc. approved the buy back of as much as $ 1 billion of stock just days after shares of China's largest search-engine company plummeted on its sales forecast.
The shares will be bought both on- and off-market in the next 12 months, with the program funded from existing cash, Baidu said in a statement on Thursday. It's Baidu's first buyback in almost seven years, according to data compiled by Bloomberg.
Baidu shares have lost 18 percent this week as the company posted earnings and forecast sales that missed analysts' estimates amid higher costs and a slowing Chinese economy. The market decline wiped out more than $ 12 billion from Baidu's valuation and extended the 2015 share drop to 25 percent.
The board will review the buyback for potential changes in its size and term, it said.
Founder Robin Li wants to tap Baidu's $ 12 billion in cash and equivalents to reshape the business.
For the past decade, Baidu has been China's No. 1 choice for search results and online maps and Li said he is determined to make it the first place consumers go to for movie tickets, home delivery and car services.
China's economy is on course for its slowest pace of annual growth in a quarter-century, and Baidu earns virtually all of its revenue in the country.
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