3. Sierra Wireless, Inc. (NASDAQ:SWIR)
Voss Capital’s Stake Value: $19,032,000
Percentage of Voss Capital’s 13F Portfolio: 7.81%
Number of Hedge Fund Holders: 14
Sierra Wireless, Inc. (NASDAQ:SWIR) is a Canadian company that provides device-to-cloud IoT solutions, connectivity services, cloud management software, and cellular modules and gateways to enterprise and industrial customers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
Travis Cocke initially purchased shares of Sierra Wireless, Inc. (NASDAQ:SWIR) in the second quarter of 2021, and he boosted his position in the company by 423% in Q3 2021, holding 1.2 million shares worth $19 million. The Sierra Wireless, Inc. (NASDAQ:SWIR) stock accounts for 7.81% of his Q3 13F portfolio.
On January 20, to strengthen its balance sheet and provide additional liquidity, Sierra Wireless, Inc. (NASDAQ:SWIR) entered into a credit agreement for a new debt financing facility for C$60 million with a 4-years term. CIBC Innovation Banking and the Business Development Bank of Canada were the lenders for this program.
Trigran Investments is the biggest stakeholder of Sierra Wireless, Inc. (NASDAQ:SWIR) as of the third quarter of 2021, owning approximately 5 million shares worth $77.3 million. Overall, according to the Q3 database of Insider Monkey, 14 hedge funds were bullish on Sierra Wireless, Inc. (NASDAQ:SWIR), with collective stakes totaling $178.6 million.
Here is what Voss Capital has to say about Sierra Wireless, Inc. (NASDAQ:SWIR) in its Q3 2021 investor letter:
“We have had some success by investing in hardware-to-software business transitions, specifically with Extreme Networks (EXTR), Avid Technologies (AVID), and PAR Technologies (PAR). Our underlying thesis has been that these transitions are less understood and perceived to be riskier than perpetual software to SaaS software conversion stories. Indeed, transition is typically longer and requires more fundamental disruption, as the hardware R&D/sales process is significantly different than a Perpetual License to SaaS change. However, if you have a large captive customer base and a competent management team to execute on the plan, the rewards can be even greater, since the company often starts from a much lower valuation than a traditional software company.
It is against this backdrop that we introduce a new core sized position (a 6.6% portfolio weight), Sierra Wireless (SWIR). Sierra Wireless has a long and winding corporate history. By our count, they have gone through eight total business pivots from their IPO at the height of the Internet bubble through today, leaving many long-term investors understandably skeptical of yet another strategy pivot by newly appointed CEO Phil Brace…” (Click here to read the full text)
