In a move it hopes will boost investor confidence, Viacom Inc. said Wednesday it will buy back up to $500 million in common stock over an unspecified time, effective immediately.
The buyback represents about 1.7% of the media giant’s 345 million outstanding stock.
Viacom last year completed a repurchase program valued at $2 billion worth of shares. Company also issued a $500 million stock buyback program in 1996.
Viacom, whose operations include Blockbuster, MTV Networks, Paramount Pictures, Simon & Schuster and 19 television stations, said it will finance the purchase program from working capital. It also owns an 80% stake in Spelling Entertainment Group and plans to buy the remaining 20% stake.
Despite news of the buyback, shares of Viacom fell 50 cents to close at $81 on a generally mixed trading day on the American Stock Exchange.
Viacom, however, hopes the buyback will boost its stock price, with one analyst saying “we think our stock is undervalued at these levels.”
The stock has been drifting steadily downward in recent weeks after hitting a 52-week high of $91 earlier this month.