Tel Aviv Shares Plunge Amid Global Market Rout

Mobileye shares badly dented after Tesla announcement; Underwriters exercise option for more Israel Chemicals shares; MySizeId eyes New York listing; Elbit Systems and RSL win orders

At the entrance to the Tel Aviv Stock Exchange, 2011.
Bloomberg

Investors came back from a long holiday weekend on Sunday to chase the bears that trampled the world’s stock while they were away. The Tel Aviv Stock Exchange’s benchmark TA-25 index dropped 2% to close at 1,433,80 points, while the TA-100 fell 2.2% to 1,282.59. At 670 million shekels ($179.8 million), turnover was fairly heavy for a Sunday and Sukkot-holiday shortened trading days. The rout extended across the market, with blue chips all posting sharp drops – Teva Pharmaceuticals was down 2.9% at 194.20 shekels, Bank Hapolaim down 2.4% at 20.03 and Bezeq off 1.7% at 6.45. Only two stocks in the TA-100 ended higher, one of them being LivePerson, which soared 7% to a close of 505.55 shekels after Credit Suisse raised its U.S. price target from $13 to $17 and upgraded its rating from Neutral to Outperform. In the fixed-income market, the price of the government’s 10-year shekel bond jumped 0.78% to slash its yield to 2.16%. Its equivalent inflation-linked bond rose 0.6% to leave the yield at 0.36%. (Shelly Appelberg)

Mobileye shares badly dented after Tesla announcement

Mobileye shares were badly dented on Friday after a much-anticipated debut of new Tesla Model S sedan that is expected to incorporate the Israeli company’s vehicle-collision technology failed to impress the markets. Mobileye shares closed down more than 11% at $48.20 in New York. Dan Gallagher, writing in The Wall Street Journal’s Heard on the Street column, noted that even though Mobileye is forecast to see sales grow more than 60% in each of the next three fiscal years, “hitting those marks still wouldn’t justify Mobileye’s valuation.” Goldman Sachs, the lead underwriter in Mobileye’s initial public offering last summer, has given the shares a Neutral rating. Nevertheless, some analysts following Mobileye remain bullish. Dougherty & Company’s Andrea James reiterated her Buy rating and $54 price target on the stock, saying that its relationship with Tesla is a “compelling endorsement of Mobileye’s technology.” (TheMarker)

Underwriters exercise option for more Israel Chemicals shares

With less than perfect timing, the underwriters for Israel Chemicals’ New York shares sale have taken an option to buy more shares three weeks after the initial offering, The Israel Corporation said on Sunday. Morgan Stanley and Barclays Capital bought about 6 million shares, equal to about 0.5% of ICL’s issued share capital, for $42 million last Tuesday, just before ICL shares began to plummet, it said. The stock had been trading above its $7 a share offering price, meaning the options held by Morgan and Barclays were still in the money. But they began to sink below that level just as the two underwriters exercised their options, and closed on Friday at $6.67 in New York Stock Exchange trading. All told, Israel Corporation has now sold 78.4 million shares, or 6.2% of ICL, leaving it with just a 49.02% stake. (Eran Azran)

MySizeId eyes New York listing

MySizeId, the Israeli application that lets people create an online profile of their personal measurements, is seeking to raise $10 million in New York. In a statement Sunday to the Tel Aviv Stock Exchange where its shares are currently traded, MySizeId said it was preparing a prospectus and planned to dual-list its stock on the New York Stock Exchange. The company, which has raised $1.7 million from investors to date, has no revenues nor any concrete business plan for how to penetrate the U.S. apparel market. It employs just 10 people, among them developers and marketing staff. The proceeds from the fundraising would be used for marketing and bringing its message to apparel makers and retailers that its app will result in fewer customers returning ill-fitting clothes. The project is still in development and is slated to be launched in the first quarter of next year, said Ronen Luzon, CEO and a major shareholder. MySizeId shares closed up 7.25% at 5.99 shekels ($1.61) Sunday. (Dror Reich)

Elbit Systems and RSL win orders

Defense electronics company Elbit Systems said on Sunday that its U.S. subsidiary, Elbit Systems of America, has won a $12.7 million contract to provide Apache Aviator Integrated Helmets to the U.S. Army helicopter fleet. The helmets will be delivered over a two-year period, said Elbit, whose shares fell 0.9% to 230.90 shekels ($61.95) in Tel Aviv. Meanwhile RSL, a tiny maker of control and diagnostic systems for aircraft, said it won a $4.3-million order from an unnamed foreign government for replacement parts. RSL closed up 14.5% at 2.10 shekels ($0.56) Sunday. (Eran Azran)