On The Street: "Why are they jumping?"
Shlomi Cohen 3/10/2000 07:30
Tower Semiconductor, Saifun and RiT Technologies
These days a lot of stocks are suddenly jumping and you are asking yourself, "what's going on? I want to know."
Well, let's try clear the smoke and find the fire in a few, if there is any.
Tower Semiconductor (Nasdaq: TSEM) jumped 20%, but as far as I know, Israel found gas in the sea near Ashdod at the South and not in the North near Migdal Haemek where TSEM located, so that can't be the connection. But a different kind of energy is. TSEM is involved with one of the most mysterious start-ups in Israel, called Saifun, that Dr. Boaz Eithan has ever founded and he signed some contracts years ago with his friend from the army (both were Israeli air force pilots) Dr. Yoav Nissan-Cohen as CEO of TSEM. Rumors are for some time that Saifun is worth maybe something like a small gas field of $1 billion and TSEM holds around 14%.
Tower is betting its future on microFLASH processes (the name for Saifun's proprietary N-ROM technology). If it proves itself, this technology will allow production of FLASH that has the smallest cell size in the industry, about 4 to 6 times smaller than what anybody else has, which is a huge advantage. Besides owning a minority position in Saifun, TSEM has certain exclusive manufacturing rights which will give it tremendous leverage in the market if microFLASH is the real deal, or in other words, if it can be shown to be good for all flash applications.
Flash components are in huge demand these days just like the stocks of companies selling products that use flash components, e.g., Sandisk (Nasdaq: SNDK) and Israel's own M-Systems (Nasdaq: FLSH) on whose board sits Saifun's CEO, Dr. Eithan. Both stocks are up more than 10 times from last year. The demand for flash is huge because of all the demand for hand held gadgets like MP3, digital cameras, Palms, cellular phones, Internet access devices, etc., all of which use flash components manufactured by Intel, Toshiba, AMD, Fujistu and more.
We hear that Saifun signed contracts with 3 large global companies to utilize the technology and probably to manufacture it for mass marketing and also hear that bankers are writing the prospectus for an IPO which will be huge -- rumors size it at $1 billion. It seems to us that some investors who are in the "know more" circle lifted the stock yesterday 20%. Dr. Eithan, Saifun's CEO, hates to speak to the media and to make hype and always said he prefers to do rather than to speak. One company that got hurt badly for this silence is DSSI, whose CEO sold the company holdings in TSEM shares not long ago for one-third the present value.
Yesterday we also witnessed some of Zisaple Group's stocks running north again, namely RIT Technologies (Nasdaq: RITT) and Radcom (Nasdaq: RDCM). Large orders are around the corner we guess for these companies. Radvision from this group is going public next week and it will be hot like all IP Telephony players. Yesterday we wrote about Victoria Secret's famous, busy on-line shop. Just as a point of information, Radware (Nasdaq: RDWR), which was founded by Roy Zisapel, the son of Yehuda Zisapel (co-founder of RITT, RDCM, SILCF, Radvision and many more) does the traffic management software of this VS intimate apparel site.
Editor's Note: This article appeared in GLOBES Arena on March 13, 2000 under the title What Makes Tower Run?
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