Without Continued R&D Support High-Tech Cos Will Collapse in 3 Weeks
I found this by searching for Comverse, here's the URL:
globes.co.il
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High Tech News
Manufacturers: Without Continued
R&D Support High-Tech Cos Will
Collapse in 3 Weeks
By Ora Koren
Almost all Israeli high-tech companies trading in
Israel and overseas, especially in foreign
markets, will rapidly collapse, if an immediate
addition to the Chief Scientist's budget is not
forthcoming. Moreover, many Israeli companies,
particularly those which have recently issued,
will be exposed to claims. "Globes" heard this
statement today from Manufacturers'
Association economic committee chairman
Shuki Abramowitz.
"A substantial number of companies can expect
a dramatic fall in company value, in addition to
the anticipated damage to companies about to
issue," added Abramowitz. "If the Chief Scientist
does not publish a statement within two weeks
announcing the continuation of support, within
three weeks companies will start to collapse,
due to the due diligence item in the quarterly
reports."
Abramowitz clarified that many companies,
including both large and startup companies,
notified the Association of their particularly
heavy fears, just before publication of quarterly
financial reports at the end of the month. This is
due to the non-receipt of planned support by the
Chief Scientist's Office for '98. These companies
had included income from the Chief Scientist in
their reports and prospectuses, based on the
criteria anchored by law, and policy which
prevailed for many years.
Chief Scientist Orna Berry announced a general
halt in support as a result of budget cuts at the
Chief Scientist's Office for '98. Following a
meeting with manufacturers' representatives, it
was decided to completely halt support of either
large companies or startups as a result of the
cut, until government policy was clarified.
There was a tendency to halt support of large
companies, but their representatives
emphasized that, as a counter measure, they
would halt the transfer of royalties to the Chief
Scientist's Office, despite the fact that it
contravened the law. They claimed that some
sort of balance could be maintained at least in
the short term, and that government legal steps
against them would drag on for years.
Executives from high-tech companies, among
them from LanOptics and Comverse, confirmed <=======
to "Globes" that a halt in support would force the
companies to change their quarterly reports and
reduce the revenue item in such a way as to
generate a lack of confidence on the part of
investors. "The minute successful high-tech
companies on Wall Street announce that the
Chief Scientist has stopped supporting them,
investors' expectations will drop, the market
value will drop, company engineers who hold
options will leave for overseas, and investors in
startups and funds will no longer arrive in Israel,"
said the executives.
Abramowitz added that the confidence crisis
among foreign investors would not end with the
companies, but would spread to the entire
economy. "There are multi-national companies
which invested in Israel, based on expected
R&D support. From their point of view,
backtracking by the Chief Scientist would create
a total breakdown in trust."
Published by Israel's Business Arena April 7,
1998 |
