Sonim Technologies Spikes On Potential $25M Acquisition by Social Mobile: Retail Loads Up On The Stock
Synopsis
Social Mobile has a limited-time exclusive right to finalize negotiations and complete the deal, while allowing Sonim to keep exploring potential reverse take-over opportunities.
Shares of mobile solutions provider Sonim Technologies Inc. (SONM) traded 5% higher on Monday after the company indicated that enterprise mobility solutions provider Social Mobile could acquire the firm.
Sonim Technologies signed a letter of intent (LOI) with Social Mobile, outlining the potential acquisition of Sonim's assets for a purchase price of up to $20 million, including up to $5 million in earn-out consideration contingent upon achieving specified revenue targets.
The LOI grants Social Mobile an exclusivity period to negotiate and consummate the transaction.
Following an exhaustive review of strategic alternatives, the Special Committee of Sonim's Board of Directors determined that the proposed transaction with Social Mobile aligns with its goal of maximizing stockholder value.
“The value of the proceeds from Social Mobile's acquisition is superior to all other offers we've received, solidifying this as the optimal path forward,” said Chair of the Special Committee, Mike Mulica.
Notable elements of the LOI include a well-outlined transaction framework, guaranteed funding with no conditional requirements, and a potential pathway for Sonim to pursue a reverse takeover.
The transaction is expected to strengthen the complementary capabilities of Sonim and Social Mobile, enhancing the combined organization's ability to serve its clients effectively.
The Special Committee remains focused on leveraging Sonim's public company status through a potential reverse takeover to further enhance stockholder value.
On Stocktwits, retail sentiment around Sonim changed to ‘neutral’ from ‘extremely bearish’ the previous day.
A bullish Stocktwits user said they are loading up on the shares.
Another user expressed shock that the stock did not rise more.
Sonim stock has lost over 68% of its value year-to-date and more than 84% in the last 12 months.
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