A Dutch auction lets a company buy back shares for cash. These voluntary programs allow shareholders to select from among a range of prices set by the issuer. The auction is controlled by the issuer, which selects the lowest priced offers to fulfill the amount of the total stated buyback. As of June 30, 2014, approximately 23.2 million American depositary shares (ADSs) had been repurchased under Actions' current share buyback program.
In a letter to shareholders, David Lee, the chairman of the board, mentioned several corporate structure options. One is "dual listing on an Asian stock exchange, where the investors are more familiar with our market power in the PMP and tablet sectors and could give us a better valuation."
Another option involves listing subsidiaries, such as Actions Technology, in Asia to increase the valuation of ADSs listed in the United States.
Lee said his company has formed a special committee to evaluate listing options for Actions and its subsidiaries.
Along with an expanded share buyback program, Actions revealed a plan to streamline its structure in terms of reporting lines and to redesignate several sales and research entities under its principal operating entity, Actions Technology.
The move appears to reflect a serious internal squabble, pitting the team working in traditional personal multimedia player products (mostly embedded) against developers of tablets and a new generation of products (based on Android).
Lee wrote in his letter to shareholders:
As competition for talent increases, our engineers have also requested that their equity incentive plans reflect the performance of their individual departments and projects that they have worked on. Our new corporate structure will allow our management to keep better track of team and individual performance and issue incentives accordingly.
Lee also said the company is exploring "opportunities in packaged license deals, joint ventures and various forms of strategic alliances with other industry players." Specifically, he mentioned options akin to the recent collaboration between Intel and Actions' competitor, Rockchip.
Though Actions is "not entertaining a horizontal merger with a direct competitor," he said, the management team is seeking "potential strategic alliance partners."
— Junko Yoshida, Chief International Correspondent, EE Times