Glass Lewis Backs Revolt at Sonim: A Crucible for Corporate Governance and Shareholder Value

The proxy fight at Sonim Technologies (SONM) has reached a pivotal moment. On July 14, 2025, proxy advisory firm Glass Lewis issued a forceful endorsement of AJP Holding and Orbic North America's slate of directors, urging shareholders to vote “FOR” the blue proxy card. This recommendation underscores a rare alignment between institutional investors and activist shareholders, signaling a stark assessment of Sonim's governance failures and the existential risks posed by its proposed deal with Social Mobile. For investors, the stakes are clear: voting for change by July 17 could be the last chance to salvage shareholder value before the company's strategic missteps become irreversible.

The Governance Crisis at Sonim

Glass Lewis' support for AJP/Orbic's nominees stems from systemic failures under Sonim's current leadership. The firm cited four critical issues:

1. Value Destruction: Sonim's stock has plummeted 74.9% over the past three months, wiping out billions in shareholder equity. A dilutive secondary offering of 7.4 million shares at $0.75 apiece—a price far below historical valuations—further diluted investor stakes.
2. Poor Capital Allocation: Management's inability to execute a coherent strategy has led to repeated operational setbacks, including a costly pivot to software solutions that failed to gain traction.
3. Executive Compensation Misalignment: The board has awarded time-based equity grants to executives despite lackluster performance, a practice Glass Lewis now flags as a red flag under its 2024 governance updates.
4. Entrenchment Tactics: The incumbent directors have resisted calls for transparency around the Social Mobile deal, including refusing to disclose key terms or independent appraisals of the transaction.

The Social Mobile Deal: A Riskier Proposition Than Meets the Eye

Central to the proxy battle is Sonim's proposed $35 million asset sale to Social Mobile, a transaction that Glass Lewis advises shareholders to scrutinize closely. The advisory firm highlighted several red flags:

• Lopsided Terms: Social Mobile's offer includes an earn-out clause that could see Sonim receive only $28 million if performance targets are unmet. By contrast, AJP/Orbic's counterproposal of $50 million—representing a 66.7% premium—eliminates this uncertainty.
• Strategic Ambiguity: The company has provided little detail on how the deal aligns with its long-term vision. Critics argue it risks ceding control over core assets to a buyer with unclear financial credibility.
• Governance Conflicts: The Social Mobile deal was approved without independent board oversight, raising concerns about self-dealing.

The urgency here is twofold: approving the Social Mobile deal under the current board could lock in irreversible value loss, while rejecting it without a credible alternative risks operational chaos.

The AJP/Orbic Slate: A Blueprint for Value Creation

Glass Lewis' recommendation hinges on the transformative potential of AJP/Orbic's nominees, who collectively bring decades of expertise in mobile technology, AI, and cloud infrastructure—precisely the areas where Sonim has struggled. Key strengths include:

• Technical Proficiency: Nominees like Surendra Singh (a veteran of cloud infrastructure firms) and Michael Wallace (with AI-driven software experience) could help pivot Sonim toward higher-margin software solutions.
• Governance Reforms: The slate includes a focus on board diversity and transparency, aligning with Glass Lewis' updated 2024 policies requiring two gender-diverse directors for non-FTSE 350 firms—a standard the current board fails to meet.
• Shareholder Alignment: AJP/Orbic's 19% stake and $50 million counteroffer demonstrate skin-in-the-game credibility, contrasting sharply with management's defensive posture.

Why Voting FOR the Blue Proxy Is a Must

With the deadline just three days away, shareholders face a binary choice: stick with a board that has overseen a 74.9% stock decline, or back a slate with the expertise and incentives to turn Sonim around. The risks of inaction are stark:

• Strategic Stagnation: Without fresh leadership, Sonim risks becoming a perpetual “value trap,” unable to capitalize on its niche in rugged smartphones or emerging software opportunities.
• ESG Backlash: Glass Lewis' emphasis on governance and diversity signals that ESG-conscious investors will penalize firms that ignore these standards.
• Litigation Costs: The proxy fight itself has already incurred legal expenses, a drain the company can ill afford.

Investment Implications

For investors, this is a high-stakes moment. Voting FOR the blue proxy is a no-regrets move to avoid compounding losses. If the AJP/Orbic slate prevails, Sonim's shares could see a valuation rebound as governance improves and strategic clarity emerges. Conversely, a victory for the incumbent board would likely trigger further declines, given the lack of credible alternatives to the Social Mobile deal.

Historically, following shareholder meetings, Sonim's stock has shown a modest positive tendency, with a 3-day win rate of 43.27%, a 10-day win rate of 42.69%, and a 30-day win rate of 44.44%, suggesting that investors who held through these events experienced gains more often than not.

Final Verdict

Sonim's governance crisis is not just about boardroom politics—it's a test of whether shareholders will prioritize long-term value over short-term entrenchment. With Glass Lewis' backing, the AJP/Orbic nominees offer a credible path forward. For those holding Sonim stock, voting by July 17 is not optional—it's the only way to avoid becoming collateral damage in a leadership failure.

Act now, or risk being left behind.