Shares of Sierra Wireless (NASDAQ:SWIR) 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.
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.
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.
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.