The Israeli AI startup that has soared 805% in four months, but is still down 66% on IPO price
The Israeli AI startup that has soared 805% in four months, but is still down 66% on IPO price
The stock that has recorded the sharpest price increases since the beginning of the year on the Tel Aviv Stock Exchange is Razor Labs, which has jumped by 156%. Over the past four months, Razor's stock has soared by 805%, but an investor who bought Razor shares three years ago and held them to this day is still down 66%
The stock that has recorded the sharpest price increases since the beginning of the year on the Tel Aviv Stock Exchange is Razor Labs, which has jumped by 156%. The figure is impressive, but it pales in comparison to the fact that in the last four months, Razor's stock has soared by 805%. However, this figure takes on a different meaning when you look at the stock graph from the day it started trading.
Razor became a public company in February 2021 and raised NIS 116 million (approximately $32 million) in an initial public offering (IPO) based on a company value of NIS 494 million (after money, approximately $139 million). The share price at the IPO was NIS 12.6 - three times higher than its current price. That is, even after the last wave of increases, an investor who bought Razor shares three years ago and held them to this day has suffered a loss of 66%.
Razor's first three days of trading on TASE were dreamy, but the honeymoon lasted only three days, after which everything started to go wrong. The stock fell by 97%, and at the low point, the company's market value reached NIS 18 million ($5 million). The drop did not happen in a vacuum. Already in Razor's first quarterly report as a public company, a decrease in revenues and a transition to an operating loss were recorded. It is never pleasant to see shrinking revenues and a profit that has turned into a loss, but when it happens in a company that has just joined the stock exchange, the unpleasantness turns into distrust.
Founded by Raz Roditti (CEO), Michael Zolotov (CTO), and Ido Rozenberg, Razor Labs operates in the field of artificial intelligence. Even three years ago, the pair of letters "AI" would have easily opened doors in the conference rooms of most institutional bodies.
The company is active in two areas: the service sector and the product sector. In the first, it offers artificial intelligence solutions specifically adapted to critical problems in organizations, but this field is negligible compared to the product sector, where Razor's focus is on improving production processes through the products DataMind AI and Inspection AI.
In the last four months, it seems that Razor has finally been able to realize some of the potential that it talked about on the eve of the IPO. The company recently reported on three transactions with multinational clients in the mining, energy, and defense sectors.
The cluster of transactions and the fact that three global corporations chose Razor products testify to their necessity and value. But this is not enough. Razor's big test lies in its ability to exhaust the expansion potential among existing customers, at the same time as recruiting new ones.
When this happens, if it happens, and when the customers trust the company's products, the investors' trust in the company and its management will also return. In such a scenario, it is likely that the share price will also reduce the large gap that still exists from the price at the time of the IPO.
