What happened

Shares of Cheetah Mobile (CMCM) were up 30.3% as of 1 p.m. EDT Tuesday after the China-based mobile internet tools company announced mixed second-quarter 2019 results and a large special dividend.

More specifically on the former, Cheetah Mobile's quarterly revenue declined 12.1% year over year to 970.1 million yuan ($141.3 million), translating to adjusted earnings per American depositary share (ADS) of 0.52 yuan ($0.08). By comparison, most analysts were modeling higher adjusted earnings of $0.12 per share on lower revenue of $133.2 million.

Woman using smartphone.

Image source: Getty Images.

So what

CEO Sheng Fu noted the company's top line arrived above the high end of its own guidance range, as a 44% decline in revenue from utility products and services (to $61.7 million) was almost offset by a combination of nearly 50% growth from the mobile entertainment segment (to $72.5 million) and sales that more than tripled from artificial intelligence and other products (to $7.1 million).

Still, today's big move likely stemmed more from a separate press release announcing that Cheetah Mobile's board just approved a special cash dividend of $0.50 per ADS. That will be payable on Sept. 30 to shareholders of record at the close of business on Sept. 13.

For perspective, that hefty payout equates to roughly $72 million in dividends to be paid, or more than 15% of Cheetah Mobile's entire market capitalization as of Monday's close. 

Now what

"Our special cash dividend payment demonstrates our commitment to delivering shareholder value, and our confidence in our business model, our execution capabilities, and the long-term outlook of the company," Fu said.

It's unusual to see such an enormous dividend, and it's unclear whether approving the payout is the best use of capital for this relatively small tech company as it works to find sustained growth. But with shares also trading near an all-time low going into this announcement, it's hardly surprising to see Cheetah Mobile rallying today.