Company News

BUZZ-Tucows touches 7-month low after Kerrisdale Capital reveals short position

** U.S.-listed shares of Tucows fall 8.3% to $53.50 after hedge fund Kerrisdale Capital reveals short position in the internet services and telecom co

** Shares touch lowest since November and are on track for worst day since May 9

** Kerrisdale says TCX's domains and its MVNO businesses are in decline and their cash flow is being redeployed into a fledgling fiber division doomed for failure

** Also believes co’s stock is worth 50%+ less than the current price

** Tucows did not immediately respond to a Reuters request for comment

** Kerrisdale describes co as an internet services and telecommunications co that consists of “two declining internet businesses and a nascent fiber business with high capex requirements and unrealistic profit expectations”

** Kerrisdale says co’s ~$700m+ valuation makes little sense and that co is likely to miss 2019 rev, earnings estimates, with shortfalls growing in 2020 & 2021

** Says factors behind the Q1 miss are likely to persist over remainder of the year, as MVNO (mobile virtual network operator) and domains segments continue to struggle while the fiber division underperforms expectation

** Stock down ~10% YTD (Reporting by Vibhuti Sharma in Bengaluru)