Israeli holding company Internet Gold-Golden Lines Ltd. plunged the most in almost four years amid growing concern that competition in the telecommunications industry is hurting profitability.
Shares of Petach-Tikva, Israel-based Internet Gold lost 17 percent to $2.02 by 12:06 p.m. in New York, the most since October 2008. The Tel Aviv shares have fallen 19 percent in the past two days to 7.89 shekels, or $1.94.
Citigroup Inc. and Bank Leumi cut their price target last week on Bezeq Israeli Telecommunication Corp., Israel’s largest fixed-line phone company, which is controlled by Internet Gold. The Tel Aviv-based company reported Aug. 2 that second-quarter sales were $679 million, a 10 percent decline from the same period last year.
“Internet Gold shares are almost like options on Bezeq,” Ori Licht, the head of research at Israel Brokerage & Investments Ltd., said by phone from Tel Aviv. “Bezeq is going down because of all the changes in the telecom sector.”
Hot Telecommunication System Ltd. and Golan Telecom Ltd. began offering unlimited mobile-phone services in May, adding to competition in the industry. Bezeq shares have lost 39 percent in Tel Aviv this year. Bezeq, Cellcom Israel Ltd. and Partner Communications Co., are the three worst-performing stocks on Israel’s benchmark TA-25 Index in 2012.