A week after Hub Security, an Israeli cybersecurity firm, finally completed its SPAC Deal with Mount Rainier Acquisition Corp and held its long awaited NASDAQ IPO, the company is already in trouble. The company did not reach anywhere near the promised $1.3 billion valuation, currently has a market cap of only around $150 million – down from $205 million – and its stock price plummeted more than 80% since the IPO.
So, what went wrong?
It could be simply that the ongoing financial crisis the world has been reeling from since the Russian invasion of Ukraine more than a year ago is hurting IPOs in general. Or, it could be the ongoing political turmoil in Israel over the government’s planned controversial judicial reforms that have sparked massive nationwide demonstrations. Many financial firms have said that the reforms will harm Israel’s economy and threaten foreign investment there because they will lead to instability.
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And Hub Security was forced to delay the IPO for quite a while after it was first announced.
And yet, there was optimistic talk from Hub Security’s leadership at the time of the IPO.
“We are extremely pleased to complete this transaction and become a public company traded on the NASDAQ,” said Uzi Moskovitch, CEO of HUB, at the time. “HUB has grown rapidly, and we believe this transformative step will support our initiatives to capitalize on the large, and fast growing market for more eﬃcient and eﬀective cybersecurity solutions. Our goal is to continue to develop and implement advanced Conﬁdential Computing and other cybersecurity technologies for our current and future customers in both government and private industries.”
“Access to larger capital markets is expected to enable HUB to accelerate its growth plans both in technology development and customer adoption while building more value for our public shareholders,” he added.
HUB Security was established in 2017 by veterans of the IDF’s 8200 and 81 intelligence units CEO Eyal Moshe and CTO Andrey Laremenko. The company specializes in protecting sensitive commercial information and has an advanced encrypted computing solution for companies and organizations aimed at preventing hostile intrusions and the theft of sensitive commercial information.
Hub Security offers cybersecurity solutions to, amongst others, the AI, Fintek, and critical infrastructure sectors. The company employs 400 employees, and its offices are located in Israel and the United States.