BEIJING, Sept. 29, 2011 /PRNewswire-Asia/ -- KongZhong Corporation (Nasdaq: KONG), a leading provider of digital entertainment services for consumers in the PRC, today announced that its Board of Directors has authorized the Company to repurchase up to US$ 15 million worth of the Company's American Depositary Shares (ADSs). The share repurchase plan calls for the ADSs to be acquired in the open market from time to time depending upon market conditions, the market price of Company's ADSs and the management's assessment of the Company's liquidity and cash flow needs. The repurchase plan is intended to increase shareholder value and reduce the dilutive effect of the Company's equity incentive plans. The Company expects to finance the purchases from existing cash reserves. The share repurchase plan was approved by the Company's Board of Directors, including the Company's Chairman and CEO, Leilei Wang, on September 29, 2011.
Leilei Wang, the Chief Executive Officer and Chairman of the Board of the Company, said, "The Board's decision to implement the share repurchase plan reflects its strong belief in the strength of the Company's businesses. With over US$ 134 million in cash and cash equivalents, we have maintained a strong balance sheet and feel confident that this repurchase plan will enhance shareholder value. This has been a challenging yet positive year for our Company and the Internet and mobile gaming industry in China. I look forward to continuing leading major strategic initiatives, including the continued expansion of our Internet games business, and building on our Company's success and maintaining focus on creating value for our shareholders."
We are one of the leading providers of digital entertainment services for consumers in the PRC. We operate three main business units, namely WVAS, mobile games and Internet games. We are one of the leading providers of WVAS to mobile phone users. We began providing WVAS on the networks of China Mobile in 2002. Since 2004, we have provided WVAS on the networks of China Unicom, China Telecom, China Netcom and the other major telecommunications operators in the PRC. Since 2004, we have also offered news, entertainment, community and mobile advertising services through our wireless Internet sites, including Kong.net, ko.cn and ct.cn. In 2008, we began reporting our mobile games business as a stand-alone operating segment, while it was previously reported as part of our WVAS business. We began our Internet games business in 2010, through our acquisition of Shanghai Dacheng Network Technology Co., Ltd., a developer and operator of Internet games.
Safe Harbor Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding trends in the wireless value-added services, wireless media, mobile games and Internet games industries and our future business, financial condition, results of operations and prospects. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends and our results may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, continued competitive pressure in China's wireless value-added services, wireless media, mobile games and Internet games industries and the effect of such pressure on revenues; our ability to develop new products that are commercially successful; unpredictable changes in technology, consumer demand and usage preferences in the markets we operate; our ability to protect our intellectual property rights; the short operating history of certain of our business segments, in particular the Internet games segment; the state of and any change in our relationship with China's telecommunications operators; our dependence on the billing systems of telecommunications operators for our performance; the outcome of our investment of operating income generated from the WVAS segment into the development of our wireless Internet, mobile games and Internet games segments; changes in the regulations or policies of the Ministry of Industry and Information Technology and other government authorities relevant to our businesses; and changes in political, economic, legal and social conditions in China, including the Chinese government's policies with respect to economic growth, foreign exchange, foreign investment and entry by foreign companies into China's telecommunications and Internet games markets. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
SOURCE KongZhong Corporation