(WEB HOST INDUSTRY REVIEW) — Internet services provider Tucows (www.tucowsinc.com) reported this week the preliminary results of its modified Dutch auction tender offer.
The company expects to purchase 4,250,000 shares of its common stock at $0.41 per share, or a total of $1,742,500.
The repurchase of the company’s shares is made possible due to the company’s unanimous approval last May of a stock buyback program, which falls within the rules and regulations of the Securities and Exchange Commission.
The buyback approval allowed the company to repurchase up to $10 million of its common stock, or 6,361,769 shares, by May 12, 2009.
The company had previously repurchased 2,616,600 common shares last February during it previous stock buyback period.
Tucows’ stock price has dropped considerably since May 12, when it closed at $0.61. The low stock price allows the company to regain the majority of its ownership at an affordable cost and eliminate the possibility of Tucows being bought up.
The company will have the option to repurchase its shares of common stock either through the facilities of the TSX or the American Stock Exchange.
The 4,250,000 shares expected to be purchased are comprised of the 4,000,000 shares Tucows offered to purchase and 250,000 shares to be purchased according to Tucows’ right to purchase up to an additional 2 percent of the shares immediately before the tender offer begins.
Tucows began the tender offer on February 12, 2009, when it offered to purchase up to 4,000,000 shares of its stock at a price between $0.36 and $0.45 per share.
Once the tender offer is completed and the payment has been received, Tucows expects to have 68,823,782 shares issued and outstanding.
Tucows provides Internet services through several brands, including its wholesale domain name provider OpenSRS, its premium domain name seller YummyNames, and its online video network builder Butterscotch.com.
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