Tucows Announces $40 Million Stock Buyback Program

Rhea-AI Summary

Tucows Inc. (TCX) announces a $40 million stock buyback program to repurchase its common stock, starting February 23, 2024, and ending on or before February 22, 2025. The program will be executed through the Nasdaq Capital Market, funded from working capital and existing credit facilities.

Insights

Financial Analyst

Stock buyback programs, such as the one announced by Tucows Inc., are a significant financial maneuver that can influence a company's stock price and shareholder value. By repurchasing up to $40 million of its common stock, Tucows is signaling to the market that it believes its stock is undervalued. This action can potentially increase the earnings per share (EPS) as there will be fewer shares outstanding, which can be attractive to investors seeking growth in per-share metrics.

From a financial perspective, the use of working capital and existing credit facilities to fund the buyback suggests that Tucows is confident in its liquidity and financial health. However, it is crucial to monitor the company's balance sheet as buybacks can sometimes lead to increased leverage and reduced cash reserves, which could impact the company's ability to invest in growth opportunities or weather economic downturns.

Market Research Analyst

A stock buyback program can also be a strategic tool for managing market perceptions. By retiring the purchased shares to treasury, Tucows is effectively reducing the supply of its stock in the market, which could lead to a price increase if demand remains constant. This move may be interpreted by the market as a management vote of confidence in the company's future prospects.

However, it is important to contextualize this decision within the broader industry and market conditions. If Tucows' sector is experiencing bullish trends, the buyback could further propel the stock performance. Conversely, if the sector is bearish, the buyback might not yield the expected positive impact on the stock price. Additionally, the decision not to purchase shares from management or insiders can be seen as an effort to avoid conflicts of interest and ensure fairness in the trading process.

TORONTO, Feb. 22, 2024 /PRNewswire/ - Tucows Inc. (NASDAQ: TCX) (TSX: TC) announced today that its Board of Directors has approved a stock buyback program to repurchase, from time to time if and as appropriate, up to $40 million of its common stock in the open market.

The new $40 million buyback program will commence February 23, 2024 and will terminate on or before February 22, 2025. Purchases for the new buyback program will be made exclusively through the facilities of the Nasdaq Capital Market. The previously announced $40 million buyback program, which commenced February 10, 2023, has been terminated.

Any shares purchased by Tucows under the stock buyback program will be retired and returned to treasury.

The timing and exact number of common shares purchased will be at Tucows' discretion and will depend on available cash and market conditions. Tucows may suspend or discontinue the repurchases at any  time, including in the event Tucows would be deemed to be making an acquisition of its own shares under Rule 13e-3 of the Securities Exchange Act of 1934, as amended. Subject to applicable securities laws and stock exchange rules, all purchases will occur through the open market and may be in large block purchases. Tucows does not intend to purchase its shares from its management team or other insiders.

The purchase will be funded from available working capital and existing credit facilities. As of February 21, 2024, Tucows had 10,936,673 common shares outstanding.

NO STOCK EXCHANGE, SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE INFORMATION CONTAINED HEREIN.

About Tucows

Tucows helps connect more people to the benefit of internet access through communications service technology, domain services, and fiber-optic internet infrastructure. Ting (https://ting.com) delivers fixed fiber Internet access with outstanding customer support. Wavelo (https://wavelo.com) is a telecommunications software suite for service providers that simplifies the management of mobile and internet network access; provisioning, billing and subscription; developer tools; and more. Tucows Domains (https://tucowsdomains.com) manages approximately 25 million domain names and millions of value-added services through a global reseller network of over 35,000 web hosts and ISPs. Hover (https://hover.com) makes it easy for individuals and small businesses to manage their domain names and email addresses. More information can be found on Tucows' corporate website (https://tucows.com).

Tucows, Ting, Wavelo, and Hover are registered trademarks of Tucows Inc. or its subsidiaries.

This release includes forward-looking statements as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our expectations regarding our future financial results and, including, without limitation, our expectations regarding our ability to realize synergies from the Enom acquisition and our expectation for growth of Ting Internet. These statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Information about other potential factors that could affect Tucows' business, results of operations and financial condition is included in the Risk Factors sections of Tucows' filings with the Securities and Exchange Commission. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements are based on information available to Tucows as of the date they are made. Tucows assumes no obligation to update any forward-looking statements, except as may be required by law.

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SOURCE Tucows Inc.

FAQ

What did Tucows Inc. (TCX) announce?

Tucows Inc. announced a $40 million stock buyback program to repurchase its common stock.

When will the stock buyback program commence and end?

The stock buyback program will commence on February 23, 2024, and end on or before February 22, 2025.

How will the buyback program be executed?

The buyback program will be executed through the facilities of the Nasdaq Capital Market.

How will the purchase be funded?

The purchase will be funded from available working capital and existing credit facilities.

How many common shares does Tucows Inc. currently have outstanding?

As of February 21, 2024, Tucows Inc. had 10,936,673 common shares outstanding.