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.