Shares of Tucows Inc. (TSX:TC)(NASDAQ:TCX) fell 8.88% in late morning trading on February 14. The company fell victim to a ferocious newsletter from a smaller short-seller in early January. Tucows released its 2017 fourth quarter and full-year results on the same day.
In the fourth quarter Tucows saw its net revenue jump 86% to $90.6 million compared to Q4 2016. Net income soared 299% to $11.2 million from $2.8 million in the prior year. For the full-year revenues rose 74% to $329.4 million and net income increased 39% to $22.3 million. On the same day Tucows also announced a $40 million stock buyback program that will terminate on or before February 13, 2019.
The aforementioned short-seller alleged that Tucows was “cashing in” on a number of unsavory characters, including “Neo-Nazis” and those who consume child pornography. It also alleged that Tucows management was hiding a lawsuit that would result in 11% of revenue from domains that would leave.
Ting Mobile, a mobile virtual network operator and internet service provider launched by Tucows in 2012, posted impressive top line and bottom line growth. The recently-implemented Tax Cuts and Jobs Act also gave Tucows a boost in the fourth quarter. The company reported that tax reform resulted by a positive tax impact of $5.8 million or $0.55 per share.
Tucows stock is plunging in spite of a very positive fourth quarter and full-year report. This presents an enticing entry point for investors on the hunt for a long-term growth stock on sale.
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