Google filed with the U.S. Securities and Exchange Commission to raise as much as $2.7 billion through an initial public offering of stock. In an unexpected move, Google sold all of its stock through an Internet-based public auction process, bypassing the traditional Wall Street route that critics say favors insiders and institutional investors over individuals. The price of the offering was modest and in the first six months the enthusiasm of the public for Google shares resulted in the doubling of the IPO price. Google has solid earnings, and the expectations for fast growth appear to be on target.
For the first time in nearly five years, Initial Public Offerings are beginning to bloom. Power over Ethernet company, PowerDsine, made its initial public offering on Nasdaq. The IPO was the first by an Israeli company in New York in 2004. The company raised a total of $58.65 million, at a valuation of $250 million. Investors traded the shares at a premium over the issue price. On its first day of trading on the Nasdaq exchange, Shopping.com's share price leaped more than 50%, reflecting a company value of $750 million.
Underlying the IPO activities were reports that Israel's VC industry was investing more, as well as raising new capital. In Q3 2004 nearly $450m. was raised by Israeli companies from venture capital funds. The activity was accompanied by sounds of renewed confidence and reports that the local VC companies were beginning to attract substantial funds from foreign investors.
Universities are increasing their activities in nanotechnology and other fields.
A case in point isBen Gurion University of the Negev whose president Prof. Avishai Braverman recently announced that a number of international business people, led by Swiss Jewish banker Edgar D. de Picciotto, chairman of Union Banque Privée, will establish a $500 million investment fund for the Negev.
Braverman said that the fund would be conditional upomatching complementary Governmental investment plan, modeled on the Irish example, with focus on granting tax exemptions over a 10-year period.
Prof. Braverman made the announcement at a recent Ben Gurion University conference, entitled, "Biotechnology: From basic research to Application". Leading Israeli and international biotechnology researchers were in attendance, including Nobel Prize Laureates, Prof. Aaron Ciechanover and Prof. Sir Aaron Klug of Cambridge University; Prof. Raymond Dwek, head of the Department of Biochemistry at Oxford University. The University impresses with its ability to gain financial backing and to attract outstanding scholars and scientists.
Additional bullish indications, such as the increased demand for technical personnel was accompanied by rising wages.
Moreover, optimistic investors on the Tel-Aviv Stock Exchange have pushed up prices of shares to new 2004 highs
External factors may also contribute to a "good" 2005.
The recent death of Yasir Arafat removes, to some extent, sponsored terrorism. Any new government that the Palestinians will elect is unlikely to openly supply funds to Hamas, Fatah and other terrorist factions.
Barring totally unforeseen events, we feel that 2005 will be by far, the best year since the end of the turbulent 1990s.
Towards the end of the year there is solid evidence to indicate that the Israeli high-tech is heading for its best year since 2000. The word Internet has lost its once tarnished image and Internet IPO's are well received by the investment public. Perhaps part of the credit goes to Sergey Brin and Larry Page who in 1998 founded the popular search engine Google while they were graduate students at Stanford University. From the outset the company's mission was to organize the immense, seemingly infinite amount of information available on the web. Google's features and performance attracted new users at an astounding rate.