. It nosedives only to zoom skyward, then plunges again, shattering the nerves of millions of investors the worldwide, not to mention Israel's high-tech industry.
Has it bottomed out? Will it rise from here or lose another 15% or 30%? People aren't talking about individual shares any more, figuring they're all rising or falling with the latest phase of the manic-depressive cycle. Long gone are the days that Israeli investors felt the
Tel Aviv Stock Exchange
was a casino compared to the stable American market, which could be relied on not to move more than 2% a day.
The Nasdaq Composite Index lost another 10% last week. But this is actually a perfect time to take a close look at the individual companies and their new prices. Here are snapshots of seven shares, in alphabetical order.
shares have fallen from $113 to $24. The company continues to lose pots of money and is carrying a heavy debt burden. The Web site crashed twice in the past couple of days, and this is the hottest time of the year. Its employees are trying to unionize ahead of possible layoffs.
Reams have been written about the company, its business model, problematic reports and leader, Jeff Bezos. But it's still trading at a market cap of $8.8 billion. Not at all cheap for a company that half the world's analysts think is heading for bankruptcy.
Ampal American Israel Corp.
The holding company of the Steinmetz family,
Ampal American Israel
, is down to $5. Its market capitalization is at $140 million, and its
price-to-earnings ratio is 10. As a holding company, its multiple is of secondary importance, but a market cap of $140 million? That's the value of one-quarter of the proto-cellular company
, which is poised to receive a service permit and to begin seriously recruiting subscribers.
Add Ampal's holdings in
, plus its stakes in
-- which plan to offer
IPOs the moment the market rallies -- and in
-- which have made the leap to the public arena -- in addition to 20 start-ups.
It seems to add up to more than Wall Street attributes to the company. So is Ampal cheap? Not necessarily. Remember: American investors aren't drooling over itty-bitty Israeli holding companies, and the company is barely known overseas.
Check Point Software Technologies
Check Point Software Technologies
is the brightest star on the Israeli high-tech horizon and an example to be emulated on Wall Street. (But remember what has happened to other companies that won similar praise over the past year.)
As its colleague companies on the Street were plunging into the chasm, Check Point two months ago published a report that had analysts competing to praise it and jostling to lift its price target to $200. Check Point rose to a peak of $177, but then, without any evident reason, its shares suddenly began to obey the law of gravity. It was down to $105 Monday, having lost more than 40% in six weeks.
A buy opportunity? Overshooting? Does the American herd not know a bargain when it sees one?
Check Point is growing fast, it's true. But with a P/E of more than 100, it's still in the precrash era of technology stocks. At that price it can't afford to disappoint, stumble, trip or even stub its little toe and grunt, lest that 40% it lost look like the opening shot to a lynch.
Down only 24% from its peak, with a P/E of
72 and a market cap of $15.3 billion,
threatens to overtake Check Point in terms of market value and to conquer the coveted Most Successful Israeli Company title. As opposed to Gil Shwed's Check Point, which insists in generating growth internally and hasn't to date used its pricey stock as currency to buy other companies, Kobi Alexander's Comverse has enviably priced shares, enormous piles of cash and a U.S. attitude toward business.
The diving prices throughout the tech sector gave Comverse the opportunity to shop around. This is also the way
grew and how
is growing -- last week Broadcom bought Israeli start-up
for $780 million in shares.
M&A is how they grow companies in the big world. We can expect Comverse to go on a shopping spree soon, unless it suddenly finds the market pricing its shares by Old Economy laws.
Israeli ISP and content-provider
took about the worst pummeling of the lot. It's down 96% from its peak of early 2000 to $2. You can buy the whole enchilada for all of $38 million, including its stake in
-- the Hebrew-language portal
launched -- and in various ISPs in Eastern Europe. U.S. investors have lost their taste for Internet activities in unstable little foreign countries.
But even if you'd buy Internet Gold at that price, apparently its parent concerns,
, wouldn't sell. It would be interesting to see whether the two Es would want to buy back shares in the company, though. And if not? What does that mean about their opinion of Internet Gold? It doesn't really matter any more to the company's executive, which received stock options at around $20 a share a year ago. And rival
can only stand back, look at the valuation of its foe and weep.
shares surprised the market with a 20% leap on Friday on hefty turnover of $50 million. Who is the busy buyer? Its controlling shareholders? Perhaps
, which issued the company and recommended it at much higher prices? But the day before, Thursday, the company dived to a market cap of only $735 million, an all-time low. That value extrapolates to a subscriber value of only $1,000 a head, judging by Partner's hints at having about 700,000 subscribers.
Suddenly, the price at which
is selling its 50% in Partner rival
group doesn't look like such a bargain. Shamrock is forking over $600 million for half of 1.4 million subscribers, or $860 per subscriber, and who knows how far the prices in the market will fall.
Another cellular carrier,
, is probably watching every move in Partner's stock anxiously, although it won't be able to float its stock any time soon. At a subscriber value of less than $1,000, even Cellcom is worth
$1.8 billion. It won't exactly come as a shock if Cellcom decides to eliminate the method of calculating its corporate value in terms of the value of each subscriber and to return to Old Economy methods based on cash flow and profits.
Formerly known as Point of Sale,
closed last week at $12, compared with $31 at its height. Its market cap is down to $123 million. The company, which develops software for retail outlets, chose the worst possible time to transform itself from a key player in a niche market into a business-to-business player offering application services. Not bad enough? It changed its name into something dot-comish. What? Hadn't they heard at Point of Sale that trendy Internet names are totally -- totally -- out?
Generally speaking, Point of Sale had managed to generate a pretty good name for itself among the analysts in Israel and America. Plenty of them warmly rated it a buy. Then its managers went and changed its name to something totally unknown. Maybe the company could close or sell its Internet business, return to making a decent profit as a manufacturer and marketer of designated software systems, and receive a decent multiple and corresponding market value. Maybe. Strange.
TheMarker is a leading source for technology and business news information in Israel. The site is a venture backed by the Israeli daily Ha'aretz and TheStreet.com. For more stories, go to