Controversial Israeli Spyware Firm NSO Eyes Public Listing, CEO May Step Down

Amitai Ziv
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Shalev Hulio, the CEO of Israel's NSO Group, at Bloomfield Stadium, in Tel Aviv, Israel, last year.
Shalev Hulio, the CEO of Israel's NSO Group, at Bloomfield Stadium, in Tel Aviv, Israel, last year.Credit: AMMAR AWAD / REUTERS
Amitai Ziv

Israel’s controversial spyware firm NSO is eying an initial public offering, and if it does so, its CEO is planning to step down. Shalev Hulio, who founded the offensive cyber technology firm known for its Pegasus software, informed employees at a pre-Passover reception that if he resigned as CEO, he would stay on in some other capacity.

Pegasus is designed to break into mobile phones, bypass detection and mask its activity. The malware infiltrates phones to extract personal and location data and surreptitiously control the smartphone’s microphones and cameras.

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In reviewing the company’s recent achievements, Hulio said that NSO has two possible paths to a future injection of major funding – an investment from a private investor or an initial public offering. There have been reports in the past of plans to have NSO go public through a merger with a special purpose acquisition company, or SPAC, a shell company that is publicly listed with an eye to acquiring a private firm.

Hulio said NSO’s value would be expected to increase substantially whether it gets an infusion of cash from a private investor or through a SPAC. The SPAC route could enable NSO to avoid the usual institutional investor “road show.” NSO and companies like it, which operate in the somewhat shadowy hacker-for-hire area of cyber technology, frequently have a hard time raising funds, if for no other reason than the negative press that they attract.

In February 2019, NSO raised funds based on a billion-dollar company valuation, at which time Hulio was quoted as saying, “We can reach a valuation of 5 to 10 billion within a few years.”

NSO at a conference in Mexico, 2019.Credit: Forbidden Stories

In his remarks to the company’s staff, Hulio said that ahead of the move to attract additional funding, the company would see key changes in its top management. If NSO decides to go public, Hulio said he would remain part with the firm but would recommend hiring a professional CEO with experience in managing public companies, while he would shift to a new role, perhaps as president. The issues were still being debated, he noted, and no final decision had yet been made.

“The ramifications of each of the different options on the company’s character, products and management positions were also presented,” the company said in a statement for this article. “In the coming months, a decision will be reached about the direction we are heading in.”

Facebook is suing the NSO Group in U.S. federal court for allegedly targeting users of its encrypted messaging service WhatsApp with Pegasus spyware. A coalition of the world’s leading technology corporations, including Microsoft, Google, Cisco and LinkedIn, have filed an amicus brief in support of Facebook.

Citizen Lab, which is based at the University of Toronto, has claimed that NSO may have hacked the phones of dozens of human rights activists around the world as well as journalists from Qatar-based Al-Jazeera television. An international investigative journalism collaborative organized by Forbidden Stories recently also suggested that the firm’s technology may have also reached drug cartels in Mexico after it was sold to local police forces. NSO denied the allegations.

With reporting from The Associated Press.

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