Israeli cybersecurity solutions company HUB Security (TASE: HUB) share price fell 35.16% this morning to NIS 4.55, giving a market cap of NIS 563,000 ($175,000), after the company reported that Israel's Ministry of Defense had disqualified a winning bid in a tender of its subsidiary QPoint Technologies. HUB Security added that the disqualification and cancelation of the tender "might influence the company's results in 2022."
This development comes after last week, HUB Security announced that it had signed a memorandum of understanding (MoU) to merge with special purpose acquisition company (SPAC) Mount Rainier Acquisition Corp., which is traded on Nasdaq, at a company valuation of $1.28 billion. The merger will provide HUB with $172 million in additional cash, although redemptions by Mount Rainier's public stockholders could reduce that amount. HUB also said that it has entered into subscription agreements with Israeli and American institutional investors for gross proceeds of $50 million in public investment private equity (PIPE) funding.
But investors have not given the planned SPAC merger a vote of confidence. After initially raising the share fell back even before today's sharp falls, which leaves it with a market cap of one eighth of the planned SPAC merger.
HUB Security, led by CEO Eyal Moshe, provides cybersecurity solutions for cloud computing and data centers. Its flagship Hub-on-Chip solution, reduced to IoT, is for credit cards, cars, cameras and the like. The company is traded on the TASE after merging with ALD last year.
Published by Globes, Israel business news - en.globes.co.il - on March 27, 2022.
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