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Mellanox Drops to January Low Ahead of Delisting: Tel Aviv Mover

Mellanox Technologies Ltd. (MLNX) slumped to the lowest in more than four months in Tel Aviv as investors sold shares (MLNX) before their removal from Israeli indexes amid the company’s delisting from the bourse.

Shares of the Yokneam Elit, Israel-based Mellanox, which makes data transfer and storage software, dropped 2.9 percent to 182 shekels, the lowest level since Jan. 30, at the close in Tel Aviv. Trading volumes were double the three-month daily average. The company has a weighting of 4.7 percent on the benchmark TA-25 Index (TA-25), which advanced 0.3 percent today.

Mellanox will be “voluntarily” delisted from the Tel Aviv Stock Exchange, the company said in a May 30 statement. The shares will be removed from Tel Aviv gauges on June 16 and will be delisted on Sept. 1, the bourse said. Some 20 to 25 percent of Mellanox shares are held in Israel, UBS AG said in a May 31 note.

“The delisting is causing a sell-off among Israeli investors who invest in the indices,” Eran Jacoby, head of research at DS Securities & Investments in Tel Aviv, said today by phone. “It would be better if management focused on running the company than dealing with bureaucracy.”

Mellanox shares have dropped 62 percent in Israel from last year’s peak of 479.9 shekels as the company issued sales forecasts below analyst estimates for three reporting periods. The disappointing forecasts led to calls to separate the chairman and CEO roles, which shareholders approved, according to a company filing yesterday.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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