SONO

Sonos ($SONO) Major Shareholder's $20M Bottom-Fishing Amid Crisis... New CEO Signals Recovery

08/05/2025 22:47

Sonos ($SONO) has caught investors' attention as major shareholders continue aggressive bottom-fishing despite the company facing its biggest crisis in 2025. Notably, Christopher Shackelton of Coliseum Capital Management has strategically purchased over $20 million worth of shares from April through August, potentially signaling a bottom confirmation for this smart speaker specialist. Sonos operates as a $1 billion market cap audio technology company specializing in wireless home sound systems and smart speakers. While competing with Amazon Echo and Google Home, the company has differentiated itself through premium audio quality and multi-room connectivity. However, a failed app update in May 2025 triggered a severe customer trust crisis. The stock chart starkly reveals the crisis severity. Starting at $15.8 in June 2024, shares plummeted to $7.7 by April 2025, representing over 50% losses. The dramatic drop to $8.9 on April 3rd resulted from panic selling following the app update failure and subsequent CEO resignation announcement. Yet precisely at this moment, noteworthy changes began. Shackelton initiated aggressive bottom-fishing on April 3rd and 7th, purchasing approximately $1.87 million at $9.17 and $8.38 respectively. This marked the beginning of systematic strategic investment rather than opportunistic buying. The June-August purchasing pattern proves even more impressive. Shackelton bought $5.2 million between June 12-13th at $9.93-$10.21, followed by another $4.2 million from June 20-24th at $9.89-$10.34. The largest accumulation occurred in late July, with $14.8 million invested over three days (July 25-29th) at $11.18-$11.43. August saw additional $2.59 million purchases at $10.38-$10.83, maintaining steady accumulation. This persistent major shareholder buying provides several crucial insights. First, Shackelton clearly values Sonos's intrinsic worth far above current trading levels. Investing over $20 million systematically across four months suggests conviction-based long-term investment rather than opportunistic speculation. Sonos's business foundation remains solid despite app issues. February 2025 results showed 64 cents per share earnings, significantly beating expectations, with revenue of $551 million exceeding the $519.5 million consensus. Though May results recorded a 58-cent per share loss, this reflected app-related costs and one-time factors. New leadership also signals positive change. Tom Conrad's formal CEO appointment in July focuses on resolving app issues and restoring customer trust. Conrad brings extensive technology experience, expected to concentrate on software quality improvement and customer experience innovation. Key metrics investors should monitor include monthly app download recovery and customer satisfaction score improvements. Additionally, Q4 results must show declining app-related costs and restored profitability. Technically, breaking the $11.5-$12 resistance level could mark a crucial turning point. In a positive scenario, complete app resolution and successful new product launches could drive shares toward $15-$18 recovery levels. Based on Shackelton's average purchase price of $10.5, this represents 40-70% upside potential. However, intensifying smart speaker competition and consumer spending slowdown could delay recovery. Currently, Sonos shows clear bottoming signals alongside recovery momentum. Continued major shareholder buying reflects fundamental recovery confidence, while new management leadership increases crisis resolution probability. Risk-tolerant investors should seriously consider entry at current levels.