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RealTime IT News

Walla IPO Oversubscribed 2,950 Times

Walla, Israel's most popular portal, went public last week on the Tel Aviv Stock Exchange (TASE) as the most over-subscribed offering recorded in the exchange's history.

Walla wanted to raise 23 million NIS (about US$5.5 million), whereas the IPO recorded a demand of 70 billion NIS (US$17 billion). Analysts explain this unprecedented demand in several ways.

First, the offering method used encouraged over-subscription; since it was obvious that every investor would receive only a fraction of his order, the investors ordered more stock than they really wanted to purchase.

Secondly, Walla is traded today at nearly half its value; according to assessments, the stock was advertised at 3 million NIS when it was valued at 6 million NIS.

Thirdly, and perhaps the most important reason, Walla is the first Internet company to go public on TASE and Israeli investors who have followed the rise of US Internet stock are hungry to invest in Internet stocks. It seems that the Internet gold rush has hit the TASE with this IPO.

Following the success of Walla's offering, other Israeli portals are lining up to try to realize the same financial potential. IOL is now negotiating to raise funds in return for 10 percent of its stock. Tapuz, a relatively small Israeli portal, has already announced its intention to go public on TASE.

Achla, another small Internet portal, was purchased by Sunny Communications, a company that imports and markets cell phones. NetKing, a popular Internet portal, is raising funds through Discount Investments.