Tucows needs a New Strategy or a New Management Style

                     Tucows has been  a stockmarket darling for the last 2 to 2/12 years.It was trading at about $12 per share two and a half years ago and moved up to the $48 to $50 area.And in the last year or so has moved from $48 to $50 area to $90.But in the last month it has fallen to $68.This blog and other investors find it's approach too eclectic.It's business is selling internet services, domaine names and mobile services.And it has one software  subsidiary called ENOM.But it also has a position in several small internet and ecommerce software companies .And it gets much of it's revenues and earnings from here.
     This blog thought recently that it was heading for $100 a share and that it's eclectic management style was being successful.But in the last 1 to 2 months it has dropped about 20%.Part of this is due to a couple of lawsuits that have been made against TC. But this blog believes another factor is that perhaps too much of it's revenue comes from government contracts.This can be remedied easily.It needs to have it's revenue more concentrated and take majority or control positions in 3 or 4 of it's more successful subsidiaries.Then it can focus on one or two internet areas instead of  being in 8 to 10 companies.This can be easily done by raising more equity.Presently it only has 10 million outstanding shares and this blog believes that situation has added to the instability of the stock.Very few technology companies with a billion dollar market capitalization have such a small number of shares outstanding.So one of our recommendations is to raise more equity and use the funds to solidify their postion in three or maybe four of their internet software companies.They need to streamline like the rapid transit train below.    

Areas of Improvement

What got Tucows from $12 to $50 a share did not get it from $50 to $90 a share. This management style is described in posts on Workathon dated December19,2016 and February 20,2017.And now it needs to change it's management style.This blog believes that most of it's subsidiaries are in e-commerce software and it needs a larger position in both 3 or 4 of these companies and in their resources.This can be done by raising more equity which will broaden it's equity base.It has fourth quarter results coming up soon and investors will be looking for some of these changes to be implemented as well as satisfactory EBITDA. This blog is looking for adjusted EBITDA of $30 to $34 million and e.p.s. of more than $3.00 per share.         use Workathon for analysis of technology  companies;use Workathon for news on technology companies