Shares up over 50% since May 1.
If you bought shares of Tucows at the opening price on May 1, just a month ago, you’ve already realized a return of a whopping 57%.
Shares in Tucows are on fire on the NASDAQ, where it trades under the ticker TCX.
It’s not entirely clear what’s behind the surge. The company reported earnings on May 7, but the stock didn’t start to surge until a week later. Here are some possible reasons behind the price pop:
1. Share buybacks. Tucows is buying back up to $20 million on the open market. Rationally, this wouldn’t justify a 50% pop in market cap. But open market buys could be pushing prices higher.
2. Increased analyst coverage. It’s been about 18 months since Tucows moved from the Toronto Stock Exchange to the NASDAQ and executed a reverse stock split. Shares have been solidly up over that time, but the added analyst attention might be paying off more all of a sudden.
3. The company is being valued as a technology company. Tucows has moved into the telco and ISP arenas, and people might be valuing the company differently as this becomes the company’s key growth driver.
4. GoDaddy. GoDaddy’s IPO has made people focus on other domain name companies, including Endurance International Group and Tucows.
5. A large player is growing its stake in the company. Institutional buyers might be warming to Tucows.
Hugh Pickens says
I think your reason 3 is what is causing the share price increase.
I think that investors are realizing that Tucows is no longer just a low growth/low margin domain name wholesaler. They are realizing that with Ting’s high growth, high margins and increasingly significant contribution to the bottom line, Tucows is deserving of a higher P/E.
Read more analysis of Ting’s growth at:
http://TingModel.com
Best Regards,
Hugh Pickens
Analyst says
They just missed by .06. Besides that they are burning cash for fiber project which may not capture that many customers with an initial fee of $399 for the build out. I can’t imagine that many customers that want to tie their service for that long to a specific company.
Ting is another MVNO. When there was the threat of Apple entering the space Ting which already faces competition from Cricket, Republic and the thousands of other MVNO is gonna have significant issues growing in the future.