TORONTO - Tucows Inc. (NASDAQ: NASDAQ:TCX) (TSX: TC), a provider of internet services and telecommunications software, has initiated a new stock buyback program, authorizing the repurchase of up to $40 million of its common stock. The program is set to begin tomorrow and will remain active until February 22, 2025, unless terminated sooner.
The company will conduct these repurchases on the Nasdaq Capital Market, relying on available working capital and existing credit facilities to fund the purchases. The exact timing and volume of shares to be bought back will be determined by Tucows based on market conditions and cash availability. The shares acquired in this buyback will be retired and returned to treasury, reducing the number of shares in circulation.
This announcement follows the closure of a previously announced $40 million buyback program that started on February 10, 2023. As of February 21, 2024, Tucows had a total of 10,936,673 common shares outstanding.
Tucows' decision to repurchase shares will be subject to market conditions and in compliance with the Securities Exchange Act of 1934. The company has stated that it may suspend or discontinue the repurchases at any time, including in scenarios where it would be considered to be acquiring its own shares under certain SEC rules.
The company's portfolio includes Ting, a fixed fiber Internet access provider known for its customer support, and Wavelo, a suite of telecommunications software for service providers. Tucows also manages domain services through Tucows Domains and offers domain management and email services for individuals and small businesses through Hover.
The information about the stock buyback program is based on a press release statement from Tucows Inc. and does not imply endorsement by any stock exchange or regulatory authority.
InvestingPro Insights
In light of Tucows Inc.'s (NASDAQ: TCX) recent announcement of a new stock buyback program, a glance at the company's financial health through InvestingPro data and tips offers a broader context for investors considering the stock's potential. Tucows, which operates with a significant debt burden and is quickly burning through cash, has been trading at a high Price / Book multiple of 7.74 as of the last twelve months ending Q3 2023. This could be of interest to investors as the company embarks on repurchasing up to $40 million of its common stock.
With a market capitalization of $232.61 million, Tucows' financial metrics indicate some challenges, including a negative P/E ratio of -2.74 for the same period. This suggests that the company is not currently profitable, which aligns with an InvestingPro Tip highlighting that Tucows has not been profitable over the last twelve months. Additionally, its valuation implies a poor free cash flow yield, which could be a concern for investors looking for companies with strong cash generation capabilities.
InvestingPro also notes that Tucows does not pay a dividend to shareholders, which may influence the investment decision for those seeking income-generating stocks. For a deeper dive into the company's financials and to access more detailed analysis, investors can explore further InvestingPro Tips, with PRONEWS24 offering an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are a total of 5 additional tips listed in InvestingPro for Tucows, providing a comprehensive understanding of the company's financial position and market performance.
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