Defense Firm's Investors Suffer Major Losses After Stock Plummets
Translated & summarized from Globes by baba
Institutional investors in Arit Industries' subsidiary, Reshef Technologies, have suffered paper losses of approximately 380 million shekels due to a sharp decline in Reshef's valuation. This follows another investment loss of about 250 million shekels from purchasing Arit shares earlier this year. The defense company's stock has plummeted by nearly 80% from its peak, impacting revenues and profits. Arit anticipates lower revenues in 2026.
The story in 5 lines · by baba
- Institutional investors lost about 380 million shekels on Reshef Technologies' valuation drop.
- Arit Industries' stock has fallen nearly 80% from its peak valuation.
- Investors previously lost around 250 million shekels on Arit shares bought in early 2024.
- Arit's revenues decreased 14% in the first half of the year.
- The company expects a 42% revenue drop in 2026 compared to 2025.
A recent valuation report has revealed that institutional investors have incurred paper losses of approximately 380 million shekels from their investment in Reshef Technologies, a subsidiary of defense manufacturer Arit Industries. This loss stems from a private placement of about 600 million shekels for Reshef in late 2025, which was later increased to 900 million shekels through option exercises by participating institutions like Clal, Phoenix, Meitav, and Mor. The valuation, conducted by consulting firm Pincushtein, Cohen & Co., indicated that Reshef's fair share price at the end of the first half of the year was around 4.5 shekels, a significant drop from approximately 8.5 shekels at the end of 2025.
These losses for institutional investors follow a previous significant investment where they purchased shares of the parent company, Arit Industries, from its controlling shareholder, Zvi Levi, in early 2024. This transaction, valued at 400 million shekels, has also resulted in substantial paper losses, estimated at around 250 million shekels, as Arit's stock has fallen by nearly 70% since that purchase. The company's stock had previously experienced a dramatic surge, reaching a peak valuation of 7.2 billion shekels at the start of the year, but has since plummeted by almost 80% to 1.5 billion shekels.
The decline in Arit's stock value is attributed to a decrease in demand for its products, impacting its revenues and order backlog. Additionally, a general downturn in defense stocks globally, linked to a reduction in international military conflicts, has affected the company. Arit's revenues for the first half of the year fell by 14% year-on-year to 133 million shekels, with net profit dropping 45% to 52.4 million shekels.
Looking ahead, Arit anticipates ending 2026 with revenues of approximately 340 million shekels, a decrease of about 42% compared to 2025. The company's order backlog also decreased by 10% from the end of 2025 to 671.8 million shekels. Despite these challenges, Arit recently distributed a significant dividend of about 529 million shekels, with a portion contingent on court approval.