Since the hostile takeover of the company by frustrated US shareholders a year ago, the share price has risen by more than 130%.
18 November 13 13:38, Shlomi Cohen
Among the Israeli stocks in my portfolio, last week unquestionably belonged to OTI - On Track Innovations Ltd. (Nasdaq: OTIV; DAX: OT5), which rose 64% to reach a market cap of over $90 million, on a turnover of a quarter of the company's shares. Since the hostile takeover of the company by frustrated US shareholders a year ago, the share price has risen by more than 130%. Ostensibly, the trigger for the rally in the share was the smartphone near field communications (NFC) deal with Asian banks, announced last Wednesday, but I believe that the jump in trading volumes can only be linked to the patent infringement lawsuit, which will reach the court in early 2014.
On Track has sued T-Mobile USA for infringing its patents on NFC-enabled smartphone sold by T-Mobile USA. The US District Court for the Southern District of New York dismissed T-Mobile's motion to dismiss the case, and it's quite possible that the investors who snapped up On Track's shares are betting that the parties will settle the case, with On-Track making tens of millions of dollars.
T-Mobile is facing a new On-Track, which is no longer the teeny-weeny Israeli company from Rosh Pina in the Upper Galilee that was run by its founder, Oded Bashan, who it should be said to his credit, dared to sue T-Mobile. After Bashan left the company, he was succeeded by Ofer Tziperman as CEO and most of the company's directors are Americans. In other words, American sharks who know a thing or two about fully exploiting patents in the mobile era are playing poker against T-Mobile.
Published by Globes [online], Israel business news -
On Track Innovations continues to climb, SA Pro article sees possibility of 5x return
On Track Innovations (OTIV +6.8%) shares trade up, possibly on an SA Pro piece by Valuable Insights (embargoed until 9:30 am ET tomorrow) that claims OTIV has a "realistic chance of delivering a 5x or better return over the next 12 months."Valuable Insights believes the company is on the "cusp of a significant operational turnaround," having shed non-core assets, secured new contracts, and built tech that will fuel revenue growth in 2014.A valuation gap exists between OTIV's fundamentals and its misunderstood, under-covered equity, the author concludes.