Allot Falls Most in Five Months on Share Plan: Israel Overnight

Allot Communications Ltd. (ALLT), Israel’s biggest maker of high-speed networking equipment, declined the most in five months after announcing a secondary offering.

Allot dropped 9.3 percent to $14.52 on the Nasdaq Stock Market, the biggest retreat since March 9. The Hod Hasharon, Israel-based company led declines on the Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York. Allot shares traded in Israel fell 0.8 percent to 50.60 shekels, or the equivalent of $14.56 at the 4:30 p.m. close in Tel Aviv today.

The technology company plans to issue 4.5 million shares, and stockholders will offer 965,000, according to a statement distributed by PRNewswire after the market closed in New York on Aug. 1. The proceeds may be used to acquire another company or invest in a new product, Allot said.

“This is how stocks react when they see a secondary offering and have to factor in a dilution,” said Daniel Cummins, an analyst at ThinkEquity LLC in New York, who has a “buy” recommendation on the shares. “There are broad expectations that this money is going to be put to work for acquisition purposes.”

Allot shares gained 8 percent on Aug. 1 after reporting a second-quarter profit of $1.6 million following a loss of $7.4 million in the year-earlier period. The company is the best performer on the Bloomberg Israel-US 25 Index in the past 12 months, surging 196 percent.

The measure dropped to the lowest level in almost a year yesterday, losing 3.3 percent, to 91.76, and is down 11 percent this year. Israel’s benchmark TA-25 Index retreated 0.8 percent to 1,178.21 today, the lowest level since Sept. 16. The Tel Aviv measure has lost 11 percent this year, or 9.4 percent in dollar terms, data compiled by Bloomberg show.

Teva Slumps

Teva Pharmaceutical Industries Ltd. (TEVA), the world’s largest maker of generic drugs, fell to the lowest level since February 2009, declining 3.9 percent to $42.06. The Tel Aviv-shares yesterday gained 1.8 percent to 151.70 shekels, or the equivalent of $43.80. The $1.76 discount is the biggest among the largest Israeli companies that trade in New York. The Israeli shares dropped to 146.50 shekels today.

The Petach Tikva, Israel-based drugmaker was cut to “market perform” from “market outperform” at Oppenheimer & Co., according to an e-mailed report yesterday.

Teva, the worst performing U.S.-traded healthcare company this year, said on Aug. 1 that laquinimod, its experimental multiple sclerosis pill, didn’t reduce relapses more than placebo in a clinical trial. The study, known as Bravo, is the second this year to show disappointing results for the medicine.

‘Mounting Headwinds’

There are “mounting headwinds and increasing uncertainty surrounding the company’s MS franchise,” Christopher Holterhoff, an analyst at Oppenheimer in New York, wrote in the report.

Teva shares posted the biggest two-day decline since October 2008, dropping 9.8 percent in New York. They have lost 19 percent this year.

Israel, whose population of 7.7 million is similar to Switzerland’s, has 57 companies traded on the Nasdaq, the most of any country outside the U.S. after China. It is also home to the largest number of startup companies per capita in the world.

Israeli technology companies raised $569 million in capital during the second quarter of 2011, the most in two years and up from $343 million in the same period last year, according to the Israel Venture Capital-KPMG Quarterly Survey released July 13.

The nation’s stock market was upgraded to developed market status by MSCI Inc. in May 2010, the same month the 63-year-old country was accepted to the Organization for Economic Cooperation.

Economic Forecasts

The Bank of Israel cut its economic growth forecasts for this year and next, saying debt reduction plans in developed countries may lead to a global slowdown.

Israel’s economy will expand by 4.8 percent in 2011 and 3.9 in 2012, the Bank of Israel said, lowering the forecasts from 5.2 percent and 4.2 percent. It predicted an average unemployment rate of 6 percent this year, up from 5.8 percent.

The shekel fell 0.4 percent to 3.4759 per U.S. dollar. The currency has increased 8.3 percent against the dollar over the past 12 months, the fourth-best performer among 10 emerging markets in Europe, Middle East and Africa tracked by Bloomberg.

Fundtech Ltd. (FNDT), the Israeli provider of banking software for Bank of America Corp. and HSBC Holdings Plc, climbed 1.8 percent to $19.05. The Tel Aviv shares dropped 2.2 percent today to 65.15 shekels, or the equivalent of $18.75.

S1, ACI Worldwide

S1 Corp. rejected an acquisition proposal from ACI Worldwide Inc. and affirmed its commitment to the pending merger with Fundtech, according to a Globe Newswire statement yesterday.

Nova Measuring Instruments Ltd. (NVMI) slumped to the lowest since Jan. 5, dropping 4.6 percent to $8.40. The Tel Aviv shares yesterday retreated 7 percent to 28.14 shekels, or the equivalent of $8.13. They gained to 29.33 shekels today.

The maker of measuring instruments for the semiconductor industry forecast third-quarter revenue of $24 million to $27 million with net profitability of 20 percent to 25 percent.

RadVision Ltd. (RVSN) declined 3.6 percent to $7.06. The Tel Aviv shares retreated 2.5 percent today to 23.93 shekels, or the equivalent of $6.94. The maker of video-conferencing systems forecast a third-quarter loss of $5.9 million after a profit of $300,000 a year earlier.

EZchip Semiconductor Ltd., the Israeli maker of network processors that counts Cisco Systems Inc. as a customer, fell 3.6 percent to $29.11 yesterday. EZchip climbed 5.3 percent today to 108.10 shekels in Tel Aviv, or the equivalent of $31.07.

To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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