Executive departures multiply Axilion's woes

Danny Yamin  credit: Tamar Matsafi
Danny Yamin credit: Tamar Matsafi

As its share price slides, Danny Yamin has resigned from Axilion's board, and co-founder Ilan Weizman and VP Dani Daniel are also stepping down.

The negative news continues to pursue Israeli technology company Axilion (TASE: AILN), which for some time has suffered from disruption to its business development plans and from a collapse in its share price, and now also from the departure of some of its managers and key people. The company's share price dived more than 20% yesterday, although it has corrected slightly today.

Against the background of the negative sentiment, Danny Yamin, formerly country manager of Microsoft Israel, announced his resignation from the company's board, which he joined just over six months ago, without stating the reason for his resignation.

Yamin was country manager of Microsoft Israel for about a decade, and he was also Microsoft Vice-President of Enterprise Business in Greater China for three years. In its 2020 annual report, Axilion described him as vice chairman of the board of directors and transformation manager.

At the same time as Yamin, Axilion co-founder Ilan Weizman, who is one of the controlling shareholders, announced that he would step down from his position as CTO in November, while Dani Daniel, VP Algorithms & AI, has made a similar announcement.

Weizman and Daniel are described in Axilion's financials as two of the three members of the senior management team, the third being Oran Dror, co-founder with Weizman, who serves as chairman and CEO. According to the company, all three have "unique knowledge in the area of the company's activity," and other capabilities "critical to its business."

Last year, Weizman was one of the ten highest earning executives in Israeli listed companies, with an employment cost of NIS 14.5 million, most of it, nearly NIS 13 million, in stock-based compensation.

Axilion Smart Mobility deals in the development, implementation and installation of artificial intelligence-based software for managing and improving city transport systems. The company was merged into a stock market shell in late 2020, and within a few months, amid the huge hype surrounding technology companies that gained momentum in the coronavirus pandemic, its share price rose by more than 2,000%, to give it a market cap of some NIS 1.3 billion at the beginning of this year.

This propelled Axilion onto the Tel Aviv 90 and Tel Aviv 125 lists, and all this despite the fact that the company was reporting quarterly revenue of just a few million shekels.

Lately, however, the wheel has turned, and the company has suffered from negative sentiment, which grew stronger this week with the announcement that a pilot transport system management project in Rheims in France had not been approved, six months after the company signed an MOU for the project.

This followed announcements that a digital city project in Aspen, Colorado would not go ahead, and that the company would halt procedures for obtaining a listing on Nasdaq in the light of changed market conditions.

Down 80% year-to-date

Axilion's share price has dropped about 60% so far this month, and 85% since the beginning of the year. Its market cap has fallen to some NIS 170 million, and the value of the holdings of the two partners Dror and Weizman has shrunk to less than NIS 40 million each.

Several financial institutions that invested a total of NIS 60 million in Axilion late last year, at a valuation of NIS 800 million when its share price was soaring, have also suffered from its precipitous loss of value, among them Excellence and More Investment House, The Phoenix, and the Alpha and Colibri private equity funds.

Research company Frost and Sullivan, in an analysis of the Tel Aviv stock market, recently revised the price target for Axilion stock to NIS 16 - 120% above the current market price. In April, Frost and Sullivan's price target was nearly NIS 53, 650% above the current market price.

Axilion has also recently disclosed a lawsuit against Dror and Weizman and against the company itself and its subsidiary, in which the claimant seeks a court declaration that he is entitled to 30% of the shares in the company held by Dror and Weizman, who reject the claim.

Published by Globes, Israel business news - en.globes.co.il - on June 23, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Danny Yamin  credit: Tamar Matsafi
Danny Yamin credit: Tamar Matsafi
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