Babylon sank 15 percent to 23.30 shekels in Tel Aviv in the past two days, the most since the company’s initial public offering in February 2007. Volumes today were five times the daily average during the past three months.
Failure to resolve the defects in the agreement’s implementation by the end of the day will lead to breach of contract, Yahoo told Babylon in a letter, according to a statement to the Tel Aviv Stock Exchange yesterday. Babylon signed in April a four-year accord with Yahoo as it seeks to diversify income sources. Second-quarter revenue from that relationship more than tripled to 32 percent from 10 percent in the previous period.
“If the deal is terminated this is bad news for Babylon in the short term because Yahoo represented 30 percent of revenue in the last quarter,” Eran Jacoby, head of research at DS Securities & Investments in Tel Aviv, said by phone today. “If the deal is preserved, then the share will correct.”
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