Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Sierra Wireless Jumped Today

By Timothy Green - Updated Apr 17, 2020 at 2:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The IoT company will add independent directors to its board.

What happened

Shares of Sierra Wireless (SWIR 0.26%) jumped on Friday after the company reached an agreement with Lion Point Capital regarding independent board members. Lion Point owns a 9.4% stake in the internet-of-things (IoT) solutions provider. Sierra Wireless stock was up about 16% at 1:50 p.m. EDT today.

So what

Under the agreement, incumbent directors Paul Cataford and Joy Chik will step down from the board. They will be replaced by two independent directors, Jim Anderson and Karima Bawa, effective immediately.

A rising stock chart.

Image source: Getty Images.

The company will also aim to increase the maximum size of the board by adding two independent directors recommended by Lion Point and one independent director selected by the board. The board expansion requires shareholder approval at the 2020 annual meeting, which is scheduled for May 21.

Now what

Didric Cederholm, chief investment officer of Lion Point, laid out the rationale for the large stake in the company: "We believe Sierra Wireless' core technology and unique position in the IoT space have significant value overlooked by the public markets. We look forward to seeing Sierra Wireless harness its full growth and profitability potential with the goal of unlocking its intrinsic value and maximizing shareholder returns."

While Sierra Wireless enjoyed a boost on Friday, the stock remains down about 46% from its 52-week high.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Sierra Wireless. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sierra Wireless, Inc. Stock Quote
Sierra Wireless, Inc.
SWIR
$30.90 (0.26%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.