The things are cheap as chips
AOL will buy back $250 million of its stock, after the value of the shares fell by 32 percent in two days. The drop had wiped out $518 million in company value, after the company reported second-quarter results on Tuesday that missed profit expectations amid weak advertising growth.
AOL Chief Executive Tim Armstrong said the stock is undervalued and buying them back would be a cheap way of restoring confidence in the outfit. AOL has been trying to turn itself around since it was spun off from Time Warner in December 2009.
The company is attempting to reshape itself into an online media and entertainment powerhouse with a growing dependence on advertising revenue as its lucrative subscription dollars from its dial-up business melts away. AOL's board said the company plans to repurchase shares over the next 12 months.