More than 20 Israeli professional companies will start trading on Wall Street in 2021, one of the busiest years on foreign markets. Half of the companies came to the NYSE and Nasdaq through the original IPO tradition while the rest were listed in conjunction with a private equity firm (SPAC) – an empty check company that raises funds to acquire an existing company.
Nearly all Israeli companies listed on Wall Street through the SPAC merger have recorded erroneous returns where there has been a mixed reaction of companies with regular IPOs. But overall, five months after the price of newly named Israeli companies that hosted the IPO reached its peak, most of them in the worst zone.
Other than that are the three big stars, which have shown a huge return: a management company monday.com (Nasdaq: MNDY), which held its IPO in June and rose 121%; across the e-commerce platform Worldwide-e (Nasdaq: GLBE), which held its IPO in May and rose 111%; and a cybersecurity company SentinelOne (NYSE: S), which held the IPO in June and rose 67%. The three companies have already been sold at higher prices but are back to normal. Of all the companies listed through SPAC they include only auto-tech company Arbe Robotic (Nasdaq: ARBE) is selling at a higher price since it was incorporated.
The stock market value (price) of all Israeli technology companies listed on Wall Street this year, compared to the price that existed during the IPO or SPAC plus is the same. But without the market caps of the three companies that have provided the best, then the total cost of the others goes down.
monday.com, SentinelOne and Global-e have added a total of $ 18.7 billion to their market (monday.com $ 8.2 billion, SentinelOne $ 6.4 billion and Global-e $ 4.1 billion), while 17 other companies have lost nearly $ 18.8 billion in their market. caps between them.
Some of the biggest losers are the gaming companies Playtika (Nasdaq: PLTK), which held its IPO in January 2021 at a company cost of $ 11.1 billion. But the weak results of third-party stocks published in early November and lowering its lead have seen the share price fall sharply, with $ 3.6 billion being cut from its market value since its IPO.
Playtika is a unique thing because the biggest fall in value comes from companies that have merged SPAC and not IPOs. For example a digital insurance company Hippopotamus (Nasdaq: HIPO), which included its SPAC merger at $ 5 billion, is trading in the $ 2 billion market alone. Online support company TalkSpace (Nasdaq: TALK), founded by Israels Oren and Roni Frank, who recently left the company, have seen its market fall 76% since joining SPAC. Israeli auto-tech company REE (Nasdaq: REE), lost $ 1.9 billion of its value, or 62%, to software development companies. ironSource (NYSE: IS), has dropped by 15% or $ 1.7 billion since its SPAC merger was completed.
“Market was peak in the first half”
What recent developments have led to this decline and what can we expect in the future? Barclays Israeli manager Ilan Paz provides separate responses to shares that reached Wall Street through a merger of SPAC with those registered through the IPO.
He said, “The stock market has been performing well in the second half of 2021 than in the first half of the year. “March and since then it has stabilized and is slowly receding. Many Israeli companies went to the market in the first half of the year and were not protected by this, they. Have suffered as much as the whole market has suffered. ‘
For companies that have partnered with SPAC, Paz mentions some. “Things are very cheap. These funds often make secret investments in public equity (PIPE) Investments, which should prove the value of the company that SPAC agreed to. This is a viable market. In the first half of the year, financial institutions said, ‘ , we do not want to join. ‘ Another interesting thing is that most SPAC agreements were closed with very few PIPE offerings because those who were supposed to invest in PIPE did not agree with their value. They entered the market through SPAC mergers because it is a matter of acquisition and value. “
In other words for companies that had IPOs, is the market due to their weakness?
“Yes, there are a lot of jobs in the market. The market is very good. They said the market is still good but I see five to ten years ago but compared to the beginning of the year. It is not good. Companies that sold the market in the first half of the year are suffering.”
What is the cause of this, economic crises or changes in investor preferences?
“On the other hand both of them. We are seeing a huge economic impact. We had two donations last week from Camtek and Kornit and although the donations were successful we heard talk of inflation raising its head, and a sharp rise in retail goods and labor costs, and concerns. that there will be a rise in interest rates, which would not be good for a large market.No doubt there are more concerns than they did six months ago.The second factor is related to the amount of revenue. . ‘ This year has been crazy. “
There are requirements but 2021 cannot be repeated
Some of the companies that owned the IPOs are now approaching the end of the six-month closing period, when the owners were banned from selling shares in the market. Does this also affect the shares, or has this already gone up?
“This is not unusual. This has already been announced on the day of the donation and everyone knows when it will happen.
How much does the shekel have to do with Israeli companies on Wall Street?
“Companies always complain that a strong circle is bad for them and that’s true – after all some corporate money is in shekels and all the money is in dollars, that’s the problem. They are all struggling with starting costs. , also in practice they receive less. If in the past the dollar they received was changed to NIS 3.80 / $ today and only NIS 3 / $, so they are disappointed. That ‘s a reality. “
Despite all the difficulties, there are several stocks that have left since their IPO – monday.com, Global-e, and SentinelOne. How do you explain this?
“In both companies there were reports of financial results that were better than what experts expected after the IPO, and predictions that were better. This has a very positive effect on the sector.”
What can we expect from your analysis in 2022? There is already a decline in the number of offerings and the consolidation of Israeli companies.
“Expecting the 2021 recurrence rate is unrealistic, no one expects such a thing. People are still optimistic about where the market is today and there is still a lot of demand from major foreign corporations and we are realistic. I hope the first half of 2022 will be good, but again, it too much to believe that the 2021 figures will repeat. This brings us back to the issue of macroeconomics. They have to answer.
Published by Globes, Israel Business News – en.globes.co.il – November 25, 2021.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.
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