Sonim Technologies' largest shareholder is trying to buy them out at $4. The stock currently sits at $1.46, but management don't want to sell. This should be a fun one.
It is surprising that this situation has attracted so much more interest than dozens of non-binding offers out there.
I feel that a few crucial points need to be added here:
- In Jun'24, Reliance Communications LLC, another company owned by Orbic's Parveen (Mike) Narula, sued Sonim and its Chinese sourcing partner for stealing its IP;
- The lawsuit described Sonim as "a failing wireless communications manufacturer that was
losing millions of dollars each year and heading for extinction until it got a significant equity
investment" (from AJP);
- AJP was alleged to be the vehicle for Charles (Chuan) Wang, the CEO of Sonim's Chinese sourcing partner Teleepoch, since Jeffrey Wang was his son;
- Despite the above, Mike Narula/Orbic obtained a proxy over AJP's shares in Mar'25, without actually acquiring the stake (definitive agreements were reported to be still in escrow);
- The proposed sale of AJP stake in Jan-25 was structured as 50% for $200k up front + the rest in 6 months and an option for the remaining 50%;
- In exchange, Orbic was expected to push Sonim to source all of its products from a company recommended by AJP for 3 years.
I would be greatly surprised if the price would not be adjusted for dilution down to 2.90 or less. Or else it means they are paying more for the company for no apparent reason.
It is surprising that this situation has attracted so much more interest than dozens of non-binding offers out there.
I feel that a few crucial points need to be added here:
- In Jun'24, Reliance Communications LLC, another company owned by Orbic's Parveen (Mike) Narula, sued Sonim and its Chinese sourcing partner for stealing its IP;
- The lawsuit described Sonim as "a failing wireless communications manufacturer that was
losing millions of dollars each year and heading for extinction until it got a significant equity
investment" (from AJP);
- AJP was alleged to be the vehicle for Charles (Chuan) Wang, the CEO of Sonim's Chinese sourcing partner Teleepoch, since Jeffrey Wang was his son;
- Despite the above, Mike Narula/Orbic obtained a proxy over AJP's shares in Mar'25, without actually acquiring the stake (definitive agreements were reported to be still in escrow);
- The proposed sale of AJP stake in Jan-25 was structured as 50% for $200k up front + the rest in 6 months and an option for the remaining 50%;
- In exchange, Orbic was expected to push Sonim to source all of its products from a company recommended by AJP for 3 years.
you don't think it will go through then?
Not sure I can make that prediction and I have no position, but the background story and various inconsistencies do not inspire any confidence.
Now, that’s the material for detective story, lol
Thanks Matt - that's a great piece of work. Following with interest.
Wow, very thorough summary of the situation. Thanks for this!
I would be greatly surprised if the price would not be adjusted for dilution down to 2.90 or less. Or else it means they are paying more for the company for no apparent reason.
Yes, I mentioned this.
Hi nice writeup. Have you seen the LOI from the new bidder Social Mobile? Curious to know your thoughts