The Zalkind brothers go on the offensive: Elco buys more Electra Real Estate shares
Following reports at the end of the week, the controlling shareholder continues to increase its stake, purchasing another 190,000 shares for 7 million shekels. Total investment since the end of the week has reached 15 million shekels.
A few days after canceling a planned offering and losing hundreds of millions of shekels in market value, the controlling shareholder of Electra Real Estate, Elco, owned by the Zalkind brothers, is again increasing its stake in the company through an off-exchange transaction. Elco's holding has climbed to 51.7%.
Last week, it was revealed that the controlling shareholder had begun accumulating shares of the real estate company to signal confidence following a plunge in their price. Elco is now purchasing an additional 190,000 shares of Electra Real Estate. The purchase was executed at a rate of approximately 36.5 shekels per share—a level similar to the previous acquisition—for a total financial value of about 6.93 million shekels.
Following this latest purchase, Elco's stake rose from 51.42% to 51.72% (approximately 33.33 million shares). This follows the acquisition of 220,000 shares on Thursday for about 8 million shekels. In total, within a few days, the controlling shareholder has acquired shares with a cumulative value of approximately 15 million shekels.
The wave of purchases by the Zalkind brothers comes against the backdrop of the turmoil Electra Real Estate has faced in the capital market. The company's recent announcement of its intention to carry out an offering of shares and options drew a lukewarm and even aggressive response from investors. The stock plunged by about 18% within two days, prompting the company to cancel the planned offering.
This U-turn did not prevent the stock from continuing to show weakness, as it lost over 470 million shekels in value and recorded a decline of about 35% over three months. The company's results are also negatively affected by the strengthening of the shekel, as most of its revenues are dollar-based.
Elco's consecutive off-exchange purchases at the 36–36.5 shekel price level clarify that the controlling shareholders are attempting to restore market confidence and signal to investors that, from their perspective, this represents a buying opportunity.
