Tower Semiconductor (Nasdaq: TSEM), which began September at $5, has now sunk to $3.46, a 31% slide. The company is issuing rights; each shareholder will receive one share and an option at $5 per unit. Many people asked me whether it’s worthwhile putting in more money these days. Most of those who asked bought Tower between $15 and $30 during the technology boom. It’s not my job to advise; there are experts, but I’m convinced of one thing, and won’t change my opinion under any circumstances – the microchip field will return to prosperity. If you don’t believe me, throw your cell phone away and go to a remote corner of Pennsylvania to live with the Amish, who have no electricity, television, or conveniences of that nature.
Ladies and gentlemen, it’s inevitable. Even those weirdos going wild in the outskirts of Pakistan and Indonesia want mobile phones.
Koor Industries (NYSE: KOR) tumbled 11% to $2.75 yesterday. Maybe you didn’t notice, but together with Amdocs (NYSE: DOX), Koor and Elscint (NYSE: ELT) are the only Israeli shares on this major stock exchange. Koor made it onto that index in a totally different era, under the management of Benjamin (Benny) Gaon, before Bank Hapoalim got stuck with its Koor shares. It was a different company then. Since then, other managers and owners have been running things there. They have virtually brought the company back to where it was before Gaon entered the picture, when Koor was a bankrupt firm under the management of the old Histadrut labor federation.
As it so often does, Bank Hapoalim found a nice way to dispose of its shares. The bank is distributing its Koor holdings to the public. If the public were in Gaon’s position, that might be a good thing, but Koor’s management is not changing. The public is getting Koor with the very same management that makes Bank Hapoalim happy to transfer the shares. I’ve seen articles praising the deal, even claiming that the way is being opened to a takeover of the concern. I’m opposed, in this case, because I think the public is being abused. It’s certainly good for the big bank, but where are the authorities, who are supposed to protect the small investor in Israel, and where are all the consultants, who uniformly praised the deal? Come on, guys, have you forgotten that someone’s getting this merchandise? What the bank did was to rid itself of an unwanted burden by transferring it to its shareholders. Thank you so much, Bank Hapoalim chairman Shlomo Nehama.
Many years ago, I was the guest of a Miami bank owner who, as Koor manager, was stuck with millions of Koor bonds. He asked me my opinion of the arrangement under which Benny Gaon became manager. The bonds were at $0.27/$1 at the time. I told him I wasn’t exactly a big fan of the Histradrut, but if it would make way for the new management, he shouldn’t sell. I assume that if Bank Hapoalim's management was convinced that Koor's current management was leaving, the bank shareholders wouldn’t be getting this dividend. I appeal to Bank Hapoalim: retain the Koor shares and distribute a monetary dividend.
Amdocs slid 5.2% to $6.35 yesterday. In addition to the general mood, Amdocs may have fallen because of an Arizona-based company named Convergys (Nasdaq: CVG), which also has a center in Europe. Convergys got a nice contract from British Telecom’s (NYSE: BTY; LSE: BT.A) marketing division. Over the next three years, together with Siebel Systems (Nasdaq: SEBL), they will try to set up a billing and customer care infrastructure for the British Telecom and its customers. Maybe Amdocs really did slip because of this deal, or maybe not. I think the deal only highlights Amdocs future chances.
Orbotech (Nasdaq: ORBK) plunged more than 11% yesterday. It was probably the effect of the Goldman Sachs analyst, who lowered his recommendation for the share at the beginning of the week. Why did it dip yesterday? Probably because Intel (Nasdaq: INTC) mentioned to investors that Goldman Sachs was probably right. There’s no reason to think that Intel is wrong, unless AMD (NYSE: AMD) is right instead.
But why did Nova Measuring Instruments (Nasdaq: NVMI) plummet 14% yesterday on a tiny turnover, when it gained 32% the previous day on a relatively large turnover? True, Nova is also in the general field of semiconductors, and that’s probably what happened yesterday, but what was the explanation for the previous day’s enthusiasm?
Now we’ll see what happens with Healthcare Technologies (Nasdaq: HCTL ) today, after it rose 35% on $500 demand yesterday. ESC Medical Systems, now Lumenis (Nasdaq: LUME) is back in my column today. The share skyrocketed 18% two days ago, following approval of its new ophthalmic laser device. Yesterday it dropped 3.4% on approval, following approval of a new ophthalmic device.
I’ll conclude with Teva (Nasdaq: TEVA), which is going from bad to worse. Yesterday, Teva received permission in Europe to keep its Copaxone drug at room temperature for eight days. This is a great advantage, so why did the share drop? I think it’s because the major drug firms, led yesterday by Pfizer (NYSE: PFE), are attacking generic drug companies. The major firms assert that the generic companies’ attempts (successful, particularly in Teva’s case) to bypass patent protection are harming medicine and patients. How? By leading the major drug firms to invest less. Experts estimate that it takes over $800 million to bring an ethical drug to market today. Unless they have patent protection for many years, generic drugs detract from the desire to invest, and obviously harm patients. This is a brilliant idea on the part of the big firms’ public relations people.
The war over the Prilosec drug, which last week ended in victory for AstraZeneca over the attempt by three generic companies to bypass patent protection, gave the Pfizer chairman the ammunition he was looking for, and he is now going around attacking all the generic companies. If Teva continues to decline because of this, you should keep a close watch, because real buying opportunities in Teva are rare.
Published by Globes [online] - www.globes.co.il - on October 17, 2002