Tsahi Nahmias's Mega Or stock drops 17% in a month: the reasons
Tsahi Nahmias and Mega Or lost ground throughout July. We examine the reasons for this decline, whether uncertainty regarding land use in Hadera will continue to weigh on the stock, and how other real estate giants are performing.
The year 2026, or so it seems thus far, is not the year for real estate stocks. The index fell by 3.1% in July, and since the beginning of the year, it has recorded a decline of 4.5%, with the significant drop occurring in the last three months — over 12%. This is happening precisely when the security situation is less tense and the war is no longer ongoing.
Real estate stocks took a hit during the war due to the possibility of project delays, the delay in interest rate cuts which greatly affected developers, and uncertainty — the factor that most influences investors, especially foreign investors. In April, after the war, the picture changed. These stocks surged significantly, and the entire index rose by 9.3%. Shikun & Binui, which led the gains in the construction index, was overtaken by Tsahi Nahmias's Mega Or. And what happened in May? The stock market as a whole experienced a volatile month, partly due to the dollar exchange rate, and the index fell by 1%.
Stocks related to the real estate world are usually divided into two: the construction index, which includes contracting and development companies that specialize mainly in actual construction — residential, infrastructure, and project development, and the real estate index, which includes income-producing real estate companies (such as REITs, property management and rental companies) as well as real estate development companies.
The difference between a contractor and a developer is the responsibility for execution versus initiation. For example, the contractor Danya Cebus is the one that performs the construction work for the developer Gindi Holdings. There are quite a few companies that engage in both infrastructure and income-producing real estate, or both residential real estate and construction through an executive arm.
Since its inclusion in the Tel Aviv 35 index, Mega Or has been treading water. Since the beginning of the year, it has risen by 85%, but in the last three months, it has recorded a decline of nearly 20% — most of it in the month of July. Even before its inclusion in the index, in April, the company's stock rose by about 20%, which brought it to a market value of 23 billion shekels. Today, its market value is estimated at only 18.9 billion shekels — a decline of more than 4 billion shekels in a short period.
It is possible that the surge in April stems from the acquisition of the land at the Alliance factory in Hadera, with the goal of expanding server farms — the main reason for Mega Or's surge in recent months. Subsequently, the Electricity Authority's announcement on stopping the granting of licenses for server farms lowered the stock price, and the market value plummeted.
Mega Or is banking heavily on the server farms on the lands it purchased. It can indeed settle for other uses for the land, but it loses its goal if that does not happen, and it is clear that investors will react accordingly to any announcement on the matter: uncertainty causes relatively sharp fluctuations in the stock, and any announcement can have an impact.
In July, it lost nearly a fifth of its value. Shikun & Binui lost nearly 8%, and the rest of the real estate giants are treading water.
