Israeli companies have raised $1 billion on the US capital market since the beginning of the year, including offers to sell by shareholders. The precise figure is $844.3 million, but taking into account the secondary offering by Wix.com Ltd. (Nasdaq: WIX), the planned offering by BioBlast Pharma Ltd. (the only Israeli life sciences company that has not yet held an IPO on the basis of its public prospectus), and if the over-allotment options in the various offerings are exercised, the total amount raised will reach $1 billion.
$1 billion – an amount that highlights the growing bubble in the primary market, which “Globes” wrote about earlier this month in an article entitled “Signs of a bubble”. This bubble is reflected by the fact that Wall Street is swooning before Internet companies, whether profitable or not, and throwing money at them on the basis of optimistic growth forecasts that are almost frightening. This is a bubble that is feeding itself, and may continue to feed itself over the coming year through the negligible Fed interest rate, which has turned the stock market into the most tempting investment instrument.
Here is another sign that might indicate a bubble. Of the twelve Israeli companies that held offerings so far this year, only three have had double-digit yields. All the others are treading water around their offering price, or below it. It is true that a month or two is not enough to test the success of an offering (at least a year is necessary), but it is possible that this sentiment indicates the pin nearing the bubble.
Published by Globes [online], Israel business news – www.globes-online.com