Bottom Shekel / Nochi Dankner, Brilliant Financier?

But not everybody in capital market circles agrees with the praise being lavished on Nochi Dankner.

Smart as a whip. Brilliant financier. Those are some of the phrases the weekend press has been using to describe Nochi Dankner following reports that one of his group companies, Koor Industries, made NIS 533 million from its ride on Credit Suisse stock, just as the financial world writhes in the throes of crisis.

But not everybody in capital market circles agrees with those descriptions. For instance, the investors who bought into Dankner's first three public offerings of 2007 probably differ. They've lost 59% of their money at best, and 77% at worst.

The quarter between March and June of 2007 was one of the strongest that Israel's primary market has known, and Dankner floated three of his IDB group companies then. The first was Clal Finance, an investment bank that raised NIS 556 million at a company valuation of NIS 1.2 billion, generating capital gains of NIS 48 million for IDB Holding Corporation.

Clal Finance ended last week at a market cap of NIS 280 million. Holders of its stock have lost almost 80% of their money, on paper, since the initial public offering.

IDB also floated Clal Bio, which raised NIS 353 million at a company valuation of NIS 900 million. Today its value on the Tel Aviv Stock Exchange is NIS 370 million.

Another unhappy offering from the perspective of investors is Starling Advanced Communications, the smallest of the three companies. It scored NIS 57 million by selling shares and bonds. Starling flew into the public arena at a company valuation of NIS 88 million and is now worth NIS 32 million. The deficit with which it floated last year has widened ninefold and it has a going-concern warning in its books.

All told, the value of the three companies that Dankner floated during last year's boom has dropped by NIS 1.5 billion.

Investors who bought NIS 940 million worth of securities at the offerings and are still holding onto them are now left with NIS 287 million.

The offerings had been led by Clal Underwriting, which is also an IDB group company and which took fees for its efforts.

Dankner has certainly shown that he has sublime timing: The companies floated at the last minute, just before the markets closed down to new offerings. All the same, he hasn't exactly proven that IPOs of companies belonging to his group are a good investment opportunity.