industrious-ga
For starters, if you didn't see the recent article about Israeli
high-tech in by Jerry Borrell in Upside magazine, it can be found
online (in two parts) at
http://www.upside.com/texis/mvm/story?id=3c8e8aa51
http://www.upside.com/texis/mvm/story?id=3c8e8b431
Before moving onto some quotes and figures, the general reason for the
poor performance of Israeli High-Tech companies in the past year is
not unique to Israel. High-tech has been crushed by as much as 75%
around the world, as witnessed by the NASDAQ.
A good proxy for Israeli high-tech startups is Formula Holding Company
(trades as FORTY on the NASDAQ). Formula is down about 55% in the last
year, or almost 90% since its peak some two and a half years ago. If
you chart Formula against the NASDAQ, you'll find that they track each
other closely, except that the peak for Formula was twice as high. The
following link shows Formula plotted against the NASDAQ on the MSN
money site:
http://moneycentral.msn.com/investor/charts/chartdl.asp?Symbol=forty&DateRangeForm=1&PT=5&CP=1&C5=6&C6=1999&C7=6&C8=2002&C9=0&ComparisonsForm=1&CC=1&CE=0&CompSyms=&DisplayForm=1&D9=1&D0=1&D4=1&D7=&D6=&D3=0&ShowChtBt=Refresh+Chart
The leading site (in English) about Israeli business is Globes:
http://www.globes.co.il/serveen/
They have search feature on their front page that lets you choose an
industry sector, like "information technology" or "telecom" and a
subject you are interested in, such as "Startups & VC."
I cannot supply direct links to the articles on the site, because it
requires login (free registration). I'll give cite three "fair usage"
examples from the past week, these article are the property of Globes.
A June 10th article by Boaz Gilmore relates to the 3rd round of
lay-offs at Trellis Photonics:
"This was Trellis Photonic's third round of lay-offs, caused by the
slump in the telecom and optical systems markets. Nine employees were
laid off at the company's Maryland headquarters in July 2001, and the
headquarters were moved to Jerusalem. Plans to build production plants
in Maryland and Lod were shelved. A second round occurred in late
2001, when the company’s Yokne'am branch was closed and 20 employees
were laid off. The company said the measure was due to the
difficulties in managing two distant development centers in Jerusalem
and Yokne'am."
Another article by Gilad Nass from June 9th relates to Dealtime
closing its operations in Japan and firing 60. The company had 350
employees just last year.
"Dealtime.com now has a staff of 140, of which 85 are in its Netanya
development branch. The company closed its joint venture with external
investors in Japan, in which $10 million was invested, towards the end
of last year. DealTime.com senior VP and general manager Eli Campo
said the Japanese venture was closed because the Japanese market was
not yet ready for the anticipated volume of online shopping. The
German branch, in which media giant Bertelsmann invested $35 million,
was consolidated with DealTime.com itself several months ago."
In an article about Corsema from June 10th, Boaz Gilmore writes:
"Start-up Coresma, a BVR Technologies(Nasdaq:BVRT) subsidiary, is
cutting its employees' salaries by 15%. Well-informed sources said the
company had recently fired three more employees, following the layoffs
from two months ago. Coresma, formerly Netgame, develops and
manufactures digital communications systems on cable TV networks.
Intense competition in the cable modem market is probably the reason
for the cutbacks. One of Coresma's main products is an end-user
solution for digital information transmission on cable networks, which
provides the customer with high-speed Internet access. Coresma CFO
Doron Tamir declined to comment on the extent of the cutbacks."
Note that all of these cases cite economic difficulties not related to
the security situation within Israel. My own Israeli stock holding, a
Ceragon (CRNT), has seen its stock slide around 40% in the past year,
despite landing several big contracts, again due to the global
downturn.
I hope you find this information useful. |
