SolarEdge slides out of S&P 500 after losing over 70% of value this year
SolarEdge slides out of S&P 500 after losing over 70% of value this year
The renewable energy company will relinquish its spot in the prestigious index after losing around $15 billion of its market cap in 2023
Two years after making history by becoming the first Israeli company in the S&P 500 index, renewable energy company SolarEdge will lose its spot in the prestigious index in about two weeks. Following the expected change on December 18, there won't be a single Israeli company remaining in the index.
Since the beginning of the year, SolarEdge shares have fallen by 71%, and the company, which previously reached a value close to $20 billion and held the position of the largest Israeli company in the world in terms of market capitalization, is now trading at a valuation of only $4.7 billion.
There are several reasons for SolarEdge's challenging year, mainly related to the macro environment that poses challenges for renewable energy companies. SolarEdge produces systems for managing solar installations. The high-interest rate, which made financing expensive, combined with an increase in the prices of goods and raw materials, led to a decrease in demand for the installation of such systems, especially in the private market (installation of home systems). A change in tax incentives in the U.S. and Europe contributed to this as well.
The S&P 500 is the flagship index of the U.S. stock markets, comprising the 500 largest companies traded on various stock exchanges in the country. It adheres to specific criteria, such as a requirement to present four consecutive quarters of net profit. Unlike the indices in Tel Aviv, the formula for entry and exit from the index is not rigid, and the list is determined by a decision of the indices committee of the S&P company.
SolarEdge was issued on Nasdaq in 2015 at a value of $620 million, and before entering the S&P 500 index, in August 2021, it was traded at a value of $19 billion. It peaked a year later, in August 2022, when it reached a market cap of $20 billion. However, since the beginning of 2023, the company's stock has fallen by approximately 71%.
SolarEdge was founded in 2006 by five former members of the Intelligence Corps' technology unit: Guy Sella, Lior Handelsman, Yoav Galin, Meir Adest and Amir Fishelov. The company is headed by CEO Zvi Lando and chairman Nadav Zafrir, former commander of Unit 8200. SolarEdge's main shareholders are large investment entities, including Blackrock and JP Morgan.
