Early Investor Sells 6.8% Stake in Smart Shooter for NIS 51 Million
Early investor Alejandro Weinstein sold his 6.8% stake in Israeli defense firm Smart Shooter for NIS 51 million following a massive $150 million Pentagon contract.
Alejandro (Alexander) Weinstein, an early investor in Smart Shooter, a developer of computerized weapon sights, sold his entire 6.8% stake in the company on Thursday for approximately NIS 51 million. According to Globes, Weinstein is a Chilean-Jewish investor whose family emigrated from Ukraine to Chile. He currently resides in Switzerland and primarily invests in biomedical companies.
Institutional Buyers and Discounted Sale
Globes has also learned that the buyers are several institutional entities and hedge funds that had been looking for several weeks to acquire a relatively large block of shares. Weinstein sold the shares at a price of NIS 16.2 per share, representing a 19% discount to the market price of NIS 20 per share. However, this market price was reached after the stock surged on the Tel Aviv Stock Exchange following a massive framework agreement with the US Department of Defense (Pentagon) valued at $150 million. The underwriter for the sale was Rosario Capital.
This sale adds to the NIS 10 million in shares that Weinstein sold during the company's IPO in March of this year. At that time, Canadian businessman Meir Gniwisch also sold NIS 10 million in shares (though he retains a major holding of 15.4% through Smart Shooter Limited Partnership), and Maj. Gen. Nitzan Alon sold NIS 2 million in shares. Company founders Michal Mor (CEO) and Avshalom Ehrlich (CTO) each sold NIS 18 million in shares at the time. Smart Shooter went public at a pre-money valuation of NIS 700 million and a post-money valuation of NIS 900 million.
Mixed Investment History
Weinstein achieved his biggest financial success with the family-owned company CFR, a Chilean manufacturer of generic drugs for the local market. He sold the company in 2015 for $2.9 billion to Abbott, following significant growth under his management.
Subsequently, he shifted his focus primarily to biomed investments. Nearly two years ago, he invested $6.5 million in dual-listed stem cell company Pluri and became chairman of its board of directors. He has also invested in digital health companies such as Tytocare, Scopio, and Medsense. On the other hand, some of his ventures were less successful, including investments a decade ago in Israeli smart glass manufacturer Gauzy, distraction-prevention tech firm Saferworld, and automotive tech company Cipia Vision.
Market Outlook and Expert Analysis
"The picture at Smart Shooter currently presents a combination of significant strategic progress and operational challenges that cannot be ignored," says analyst and investment manager Lior Wieder, founder of the 'Machpis Revach' service.
"On the positive side, yesterday's framework contract with the US Department of Defense, valued at up to $150 million, constitutes a top-tier security vote of confidence and a substantial boost to the technological standing of the SMASH system," Wieder notes. "Furthermore, the entry of institutional bodies through the share distribution of approximately NIS 50 million provides significant tailwinds, and the exit of the insider removes a persistent weight and sales pressure from the market."
At the same time, Wieder points out that an IDIQ-type contract structure does not constitute an immediate purchase commitment or a guaranteed order backlog, meaning actual revenue depends on specific individual orders. Additionally, as reflected in the second-quarter results, the company faces eroding gross margins, a surge in operating expenses, and a drop in operating income, meaning it still needs to demonstrate a substantial bottom-line improvement.
