Morris Laster allegedly stated that the company was worth $1 billion. The company denies it.
CEOs of listed companies are usually wary about stating what they think their company's share price should be, or even of getting close to this territory. However, now and again a remark in that direction reaches the ears of the Israel Securities Authority, and raises questions. Today, the Authority asked BioLine, which is traded on the Tel Aviv Stock Exchange, for clarifications of statements by its CEO, Morris Laster, that the company should be worth a billion dollars, rather more than its market cap of NIS 350 million before Laster's declaration. After he said what he said, the company's share price shot up 27%, on turnover twenty times its daily average, taking its market cap to NIS 440 million.
In response, the company released a statement to the stock exchange in which it explained that the CEO estimated the potential value of its two leading products, and did not intend to give a valuation of the company. Nevertheless, the Securities Authority banned the company from issuing securities until further notice.
Today's rise in BioLine's share price did not necessarily stem from Laster's remarks. Yesterday, the company reported good results in a Phase II trial for a schizophrenia treatment. Other biomed company's have seen much larger jumps in their share prices after similar announcements, without any headlines about their values.