From The Globes
Wednesday, Mar 15, 2000 Sun-Thu at 18:00 (GMT+2)
Stock Market News
Eshed Robotec Rises of 2000% To Be Translated into Cash on Nasdaq
By Dafna Zucker
"I personally am a great believer in the company, so I am continuing to hold an increasingly large share package", Eshed Robotec managing director, COO, and shareholder Rafael Aravot told us last week. It seems, however, that a 2000% increase over six months does something to the greatest of believers, and Aravot is not made of iron.
Eshed Robotec, an industrial firm with sparks of high tech, yesterday announced it would hold its second Wall Street issue. We won't be surprised if the issue includes a share offering by the owners (Aravot, vice managing director of finance Menachem Zenziper, chairman Gideon Missulawin, and Arie Kraus).
Issues are conducted when possible, and in the case of Eshed - wild rises without any apparent economic reason - the move may be said to have been dictated by circumstances. The amount of the capital raising, the company value at which it will take place, and the issue's structure have not yet been determined. With a market value of $200 million following a 24% rise in the past two days, however, it would not be overboard to assume that at least $30 million will make its way to the company coffers and/or the owners' pockets.
By the way, Eshed is not the first of the Israeli companies being issued to exploit the technological momentum on Nasdaq. M-Systems, Optibase, TTI, Magic, and Radware, all Israeli companies, have held second issues.
Aravot told "Globes" yesterday that the company intends to hold the capital raising round immediately after the expected publication of the company's 1999 financial statements at the end of the month.
Eshed Robotec, which is traded both on the Tel Aviv Stock Exchange and Nasdaq, manufactures robots and imaging systems. The company reported expected revenues of $10 million at the beginning of the year (almost equal to its annual turnover) and a handsome profit from a contract signed with Yaskawa of Japan, which partners Eshed in a joint subsidiary.
At the same time, the crazy upward move on large turnovers in Eshed's share apparently had completely different causes: reports of technologically oriented activity - a minor $75,000 investment in an Internet venture for replacing music files and the setting up of a sub-subsidiary company called MEMCALL, which develops technology for faster information searches.
The technology, based on a registered patent, is capable of increasing retrieval speed for memory-stored information. Aravot said a few days ago, "The success of this technology can cause a real revolution, with many Internet applications also".
Eshed Robotec's new identity as a technology company was given a stamp of approval in the form of a slight mention in analyst Thom Calandra's Internet column. Eshed finished the first three quarters of 1999 with revenues of NIS 41 million and a net loss of NIS 470,000. Eshed moved into the black in the third quarter of 1999 with a net profit of NIS 1.5 million.
Published by Israel's Business Arena on March 15, 2000
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