Cellular revolution ends with plummeting stocks
Israel's newest cellular companies launch services but fail to make their mark on stock market as TASE day of trade ends with significant losses
As Israel's newest cellular companies launched their services on Tuesday and their race to win the hearts and pockets of Israeli consumers, trade on the Tel Aviv Stock Exchange (TASE) plummeted on Tuesday in spite of the recovery in the European markets after a better than expected growth report from Germany.
The negative trend was led by Israel's communications companies, chief among them – Cellcom which published disappointing first quarter results.
The introduction of two new cellular operators – Golan Telecom and Mirs which is introducing a cellular network under the auspices of Hot Mobile – have led the major communications companies' stocks to be traded at a high volume while suffering from a sharp drop.
Cellcom's stocks dropped by 10.3%; Partner's stocks were down by 6.42%; Hot's stocks plummeted by 11.09%; and Bezeq's stocks (with a controlling interest in Pelephone) lost 3.18%. Rami Levi, one of the newest faces in the communications market saw its stocks drop by 2.58%.
Cellcom recently announced that its net profits plummeted by 43.5% in the first quarter to NIS 173 million ($45 million). Yet the company also noted that thanks to efficiency increasing measures it managed to save NIS 80 million ($21 million). A move that improved the first quarter results when compared with the fourth quarter of 2011.
