SITESTAR ANNOUNCES BUYBACK OF SHARES.

Byline: Chris Sieroty Staff Writer

ENCINO - Shares of Sitestar Corp., an Encino-based Internet holding company, gained almost 24 percent Monday after the company announced that it would buy back up to 1 million shares of its common stock.

``This act is in line with the company's continued efforts to increase shareholder value,'' said Clinton J. Sallee, Sitestar's president and chief executive officer.

This new stock buyback continues the company's previous program announced in May. The company has purchased hundreds of thousands of shares in the past five months in an effort to boost its sagging stock price.

``I don't know how much the buyback will cost,'' Sallee said. ``There are some people that have restricted stock so it's impossible to tell right now. The goal is to drive the stock buyback on the open market.''

Jeff Cabot, senior vice president of Sutro & Co. in Los Angeles, said there are two sides to the coin when it comes to stock buybacks.

``One side is that there is new demand entering the market, which hopefully will get the share price to rise,'' explained Cabot. ``On the other side, you are reducing the float. It goes to the issue of how much stock is out there in the marketplace.''

Sallee added: ``If you look back a year ago, we were traded on the pink sheets and were not in SEC compliance and we were trading around $2.50 a share and losing money. We are now cash flow-positive and growing faster than before, both internally and by acquisition, and our stock is trading at 32 cents.''

Sitestar's wholly owned subsidiaries include Soccersite.net, Greattools.com and Holland-American.com. Recently, the company announced it had offered to buy New York-based Fashionmall.com for $22.5 million in cash.

Shares of Sitestar gained 6.5 cents, or 23.64 percent, to close Monday at 34 cents on heavy volume of 779,600 shares traded on the OTC Bulletin Board exchange.