Sector Snap: CDC Jumps on Buyback Update
Friday December 28, 12:33 pm ET
By Rachel Metz, AP Business Writer
CDC Shares Rise With Share Buyback Update, Perfect World Rises After Launching Expansion Pack
NEW YORK (AP) -- Shares of CDC Corp. soared ahead of the Chinese Internet sector Friday after the gaming and software company said its directors and executives repurchased about 468,000 of its shares under a prearranged trading program in the last nine trading days.
CDC shares rose 97 cents, or 23.6 percent, to $5.08 in high-volume trading. In the past year, the stock has moved between $3.69 and $11.45.
The buyback adds to the 366,000 shares CDC had already bought back in the current quarter for $2.3 million.
In a phone interview Friday, Pacific Growth Equities analyst Derrick Wood said the share buyback news was a catalyst that caused the stock to rise.
Wood said that the company's specific mentioning of directors and executives buying back the shares surprised him, and shows investors that the buyers have confidence in the company.
"I think that the heavy insider buying as of late has certainly helped people understand the stock is probably undervalued and has been oversold," he said.
Meanwhile, American Depositary Shares of online gaming company Perfect World Co. rose 14 cents to $28.13.
Perfect World said Friday that it released a new expansion pack for the game "Legend of Martial Arts" on Dec. 20 called "Born to Be King." The pack includes new rewards and new content including "Clan Base System" and "Advanced Territory Battle System."
Competitor The9 Ltd.'s ADS declined 55 cents to $21.76, while NetEase.com Inc. declined 9 cents to $18.94.
Elsewhere in the sector, shares of Chinese Internet portal operator Sohu.com Inc. shed 29 cents to $53.85, while rival Sina Corp. declined 90 cents to $44.05.
