Qiao Xing unit starts $20M buyback program

Qiao Xing Universal Telephone Inc., one of China's largest makers of cell phones, said Wednesday its mobile telephone unit will begin a $20 million buyback program.

Qiao Xing Mobile Communication Co. will fund repurchases made under the program from available working capital.

Wu Zhi Yang, vice chairman of Universal Telephone and chairman of the mobile unit, said in a statement the buyback "reflects our ongoing commitment to increase shareholder value and confidence that the current share price levels do not reflect our current potential value."

Repurchasing stock takes a company's shares out of circulation, boosting the value of existing shares and fattening profits measured per-share.

Companies usually repurchase shares when they feel their stock is undervalued.

Shares fell 18 cents, or 7.2 percent, to $2.33 during midday trading. The stock is down 70 percent since the start of the year.