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

Tucows

26/06/2019 15:14

** U.S.-listed shares of Tucows  TCX.O   TC.TO  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 https://prn.to/2xgLoTT 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)
 ((RM: vibhuti.sharma.thomsonreuters.com@reuters.net))