Allot Plunges Most Since August as Network Gear Sold to Iran
December 25, 2011, 10:42 PM ESTBy Zachary Tracer
(Updates to add analyst’s comment in fourth paragraph.)
Dec. 23 (Bloomberg) -- Allot Communications Ltd., an Israeli maker of high-speed networking equipment, plunged the most in four months after Bloomberg News reported that the company’s Internet-monitoring gear was sold to Iran.
Allot fell 6 percent to $15.69 at 12:44 p.m. in New York, after earlier plunging as much as 13 percent, the steepest intraday decline since Aug. 18.
The Hod Hasharon, Israel-based company sold the equipment to Randers, Denmark-based technology distributor RanTek A/S, which repackaged it and shipped it to Iran, Bloomberg reported. Israel prohibits “trading with the enemy,” which includes Iran. The Israeli Defense Ministry is investigating the report, according to an e-mailed statement today.
“Investors don’t like these kinds of international violations of rules,” said Jay Srivatsa, an analyst at Chardan Capital Markets. “Given the tensions between Israel and Iran, anything like this is probably going to take a little bit of time to see what’s happening.”
Allot complies “fully with Israeli and non-Israeli laws, including all applicable export laws and regulations,” the company said in a statement today. “The company is investigating the claims contained in the Bloomberg article.”
The gear shipped to Iran, NetEnforcer, can inspect pieces of data moving over a network. It can be used to eliminate spam or help network operators prioritize certain types of traffic. The technology, called “deep-packet inspection” can also be used to monitor e-mails and prevent activists from using the web anonymously.
Sales Employees
Three former sales employees for Allot told Bloomberg News it was well known inside the company that the equipment was headed for Iran. Allot officials said they have no knowledge of their equipment going there and are looking into RanTek’s sales.
“We do not authorize any sales to Iran,” said Jay Kalish, executive director of investor relations at Allot. If its products were shipped there by RanTek, it would be a “breach of contract.”
RanTek officials didn’t respond to e-mails and phone calls seeking comment.
--With assistance from Jonathan Ferziger in Tel Aviv and Benjamin Elgin in San Francisco. Editors: Richard Richtmyer, Brendan Walsh
To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net
