Shares of

Computer Sciences

(CSC)

plunged on Friday after it announced it was no longer pursuing a sale of its company, and would instead buy up to $2 billion of its stock.

The company also said that the

Securities and Exchange Commission

requested information related to its stock options practices. CSC said it would comply with the request.

Investors fled the stock, sending it down 11.2%, or $6.23, to $49.65 in midday trading.

"We are very optimistic about the company's prospects and excited by the opportunities we see for continued growth," CSC Chairman and CEO Van Honeycutt said in a statement late Thursday.

The $2 billion sum represents about 19% of the company's outstanding stock. The company said Thursday it will buy $1 billion of the stock immediately through several accelerated share repurchase transactions, paid for with cash and short-term borrowings. The remainder of the shares will be bought on the open market.

The company said the repurchase will improve the efficiency of CSC's capital structure, lower the cost of capital and boost earnings per share.

Bernstein analyst Rod Bourgeois, who rates the company underperform, said it was positive to have the ownership question resolved.

"Aggressively repurchasing stock could weaken CSC's balance sheet and credit profile in such a way that it will create concern for CSC customers and prospective customers," Bourgeois wrote in an email. "At the same time, we think CSC's competitive problems could attenuate some, as the takeover speculation is put to rest."

The IT services firm said it was on track to

meet its previously stated expectations for the quarter, excluding the gain on its sale of DynCorp International preferred stock and excluding the effect of the newly announced share repurchases.

For the first quarter, CSC forecast revenue between $3.4 billion and $3.5 billion. Earnings per share will be in the mid-60 cent range, excluding options expenses of 4 cents a share and expense impacts of restructuring charges.