It's a shopper's paradise for bargain hunters of Wall Street-traded Israeli companies
Yesterday the Israeli press reported that
was negotiating to take over rival
. Orckit had been doing spectacularly well on
Nasdaq until February, when the bottom fell out. Whether the report is true or not, the logic behind it is clear. Orckit, which in recent months has been savaged by
, is down to a meager market cap of $153 million. At its peak, the company was worth $1.8 billion.
If the rivals do indeed merge, then it must be that ECI's honchos believe Orckit has hit the bottom, so the price can't get better.
But Orckit is just one name on the list. Take for instance the merger completed two weeks ago between
, a supplier of solutions for e-business. Back in February, when its market cap stood at $504 million, it was highly unlikely that Ness would manage to squeeze any kind of deal from Sapiens, let alone a merger leaving Ness with a two-thirds share. But that is exactly what happened when Sapiens' market cap dropped to $100 million.
The table further illustrates that Sapiens and Orckit are far from being lonely examples of alluring acquisition opportunities. A lot of Wall Street-traded Israeli-related companies are craning their corporate necks to gaze up at their peak prices. On paper, at least, some could be excellent bargains.
The combined market cap of the above 14 companies is down to $2.85 billion. If you have $3 billion in pocket, you could buy the lot.
Everything is Relative
Three billion dollars may sound like a lot of money. But if you look back to the value of these companies on the eve of the technology sector crisis, you will discover that the same basket would cost you $11.9 billion, or 4.2 times its price today. In other words, the value of these companies shrank by an astonishing 76%.
The table says it all. It brings home the notion that $360 million can help you take over
(theoretically speaking, of course), that
can be bought, lock, stock and barrel, for a scant $300 million. It further illustrates that
is a regular bargain at $400 million (its original market cap being $2.2
Aladdin Knowledge Systems
Arel Communications and Software
are practically freebies, valued at a total of $150 million.No one is sure, mind you, whether yesterday's prices will ever return. Nor can one promise that their current values are rock bottom. But when Ness Technologies is on the prowl and ECI is snooping around, when rumors are that
Nova Measuring Instruments
has had potential buyers visiting while
Magic Software Enterprises
is buying back its own stock, the majority of companies listed could well do with a "Clearance Sale" tag.