A few years ago, the cannabis field was the hot hit of the Tel Aviv Stock Exchange with jumps of hundreds of percent in stocks that traded in the field. As in many other cases, such enthusiasm does not end well, and investors have realized that the road to companies that earn enough to justify a market value of hundreds of millions and even billions of shekels is still long. With this understanding came the inevitable drop in the market value of the stocks of these companies.
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opening:32.9
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For example, it jumped 140% in 2018 – the bubble peak of the cannabis market in Israel. In 2019 it had already fallen 25%, the following year by another 52% and in 2021 the company lost another 70%. In total, the company has lost 92% of its value in the last three years since the cannabis bubble was launched, and today it is traded at a value of NIS 32 million, compared to a value of hundreds of millions at its peak. The annual reports certainly explain this: losses of NIS 1.2, 0.8, 8.8 and NIS 13.4 million in 2018 to 2021 since its issuance. Revenues in 2021 amounted to NIS 658,000.
From trend to trend
About two and a half years ago Manor and Kfir Gindi They actually saved the company from deleting in parallel with its merger into the biopharm they own. Simply put, it was basically a biopharm’s entry into Conanmud’s stock market skeleton. But even then it became clear that there were faults – in parallel with the merger, a failed IPO was made and the share price continued to fall. The market did not believe in Gindi to improve the business situation.
And so since the merger the company has been losing ground – in business and in the stock market. Now the Ginds are interested in emptying it of the existing activity when the two’s goal is to switch the activity to their real area of expertise – real estate activity.
Since the cannabis business is not really on the rise, the owners of the company Manor and Kfir Gindi decided to change its purpose and cast new activity into this skeleton. One of the hottest areas in the capital market at the moment is the urban renewal market, which is exactly what the Gindi brothers are doing. The company announced to the stock exchange today that it is merging the real estate activities of the Leonardo Group, owned by Yair Mark, Sahaf Cohen and Zeev Mark, into Conomod’s skeleton. Leonardo has been active since 2006 and has already provided over 1000 housing units. Real estate projects, with an emphasis on urban renewal.
Leonardo concentrates in the Tel Aviv and Sharon area and is a partner in projects with companies such as Ashdar, Africa Israel, Sofrin and Metropolis. The company has hundreds of apartments in advanced stages of construction and initiation. Subject to the completion of mutual due diligence, the signing of a detailed agreement and the fulfillment of a number of conditions precedent, the entire Leonardo Group’s activity will be merged with Conomod, in exchange for the allotment of new shares to Leonardo’s shareholders. Upon completion of the transaction, the merged company will be called the Leonardo Group and its trademark on the stock exchange will change accordingly. As part of the outline, it was agreed that the merged company will have a total cash of NIS 20 million, less transaction expenses and that upon completion of the transaction, the existing assets in the field of medical cannabis will be removed from the merged company.
Manor Gindi stated in the publication of the transaction report that “we examined a large number of companies in the real estate field, and from our experience we selected Yair and the drift from the Leonardo Group who knew how to bring in quality projects and many years of experience alongside initiating excellent projects in urban real estate renewal.”
Conanomed chairman Ami Barlev added that “we have had the privilege of conducting an extensive business move towards a merger with the Leonardo Group – a group with a proven record track and high capabilities in the fields of initiation and execution. The Leonardo Group has been showing excellent results and growth for years, but beyond that, it excels in the quality, level and quality of the projects it carries out. My husband, the founders and managers of Leonardo have created with their own hands over the years, a successful activity and beyond – an activity that presents high values and a vision of building the country for the benefit of its residents. Over the last period, Conomed has adopted a clear strategy for locating quality and conservative investments, which are characterized by proven, profitable and successful activities – all with the clear goal of bringing value for the benefit of Conanmud and its shareholders. We are entering a quality field, growing and with a significant horizon, but more importantly – with the right partners. ”
Sahaf Cohen, without Leonardo, stated that “entering the capital market will allow the group maximum financial flexibility, while relying on the core values that characterize the group, maintaining high standards in initiating and executing and providing the best product to the company’s customers.” Will allow us to continue to expand the company’s operations into additional and profitable areas.The Leonardo Group will continue to work to increase its backlog and develop additional projects with the goal of increasing its revenue.
Yair Mark, one of the owners of Leonardo, added: “The Leonardo Group is a long-standing company, a third generation of builders. So far we have preferred to be ‘under the radar’ when it comes to our public exposure. By nature we are conservative people, “Maximum for our customers. As a company that is both an initiator and an executor, we have all the control rods in the various projects, this fact allows us to maintain optimal quality and impeccable reputation.”
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