QualiTau: Private Placement – February 2026 Update
Disclaimer: This content does not constitute investment advice or a recommendation to perform any action. The author holds shares of the company and is not a licensed investment advisor. The statements herein represent personal opinion only, may contain errors or inaccuracies, and do not replace a thorough review of the company’s official reports. This text may contain errors or inaccuracies and does not constitute any guarantee or assurance of returns.
This letter is a translated version of the Hebrew Edition:
Introduction
I have been waiting for the right moment to issue the update letter on QualiTau. Tonight, February 23, 2026, QualiTau announces an extraordinary private placement that I would like to discuss in detail.
Follow-up article to the analysis of the results for Q3
In my previous letter, I reviewed QualiTau’s Q3 2025 financial report. In this letter, I will address the private placement and several additional updates and key messages that emerged, among other things, during the conference call held on December 1, 2025. During the call, I raised several questions to the company’s management, which received detailed responses and added another layer of clarity regarding the demand environment, growth drivers, and the challenges expected in 2026.
QualiTau’s conference call paints a much broader picture than what can be seen in the financial statement alone: not only a historic record quarter, but also a structural shift in the composition of demand, in the map of geographic opportunities, and in the role of the company’s solutions and products within the global semiconductor industry. The remarks made during the call reinforce, in many respects, the analysis presented in the previous article.
In this letter, I will attempt to consolidate the full picture, interpret management’s remarks, and place them within the broader context of the investment thesis I presented in my previous letter.
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Structure of the Letter
Part A: The Private Placement
Private Placement + Bottom Line
Part B: Forward-Looking Insights
Demand and the Record Quarter: What Really Drove the Sharp Increase in Sales
Order Backlog and Its Implications for 2026
Record Profitability and Operating Leverage: An Indication of Value and an Efficient Business Model
Reduced Dependence on China Alongside Growth in Europe and Asia
The Impact of Tariffs in 2026 and the Company’s Preparation for the Expected Changes
Growth Drivers
The Company’s Production Capacity: What We Learned from the Acceleration in Production During Q3
Part A: The Private Placement
Material Private Placement: A Step Change
QualiTau announced that its Board of Directors approved a private placement of 368,852 shares at a price of NIS 610 per share, for total gross proceeds of approximately NIS 225 million. In addition, 184,426 non-tradable warrants were allocated, exercisable at NIS 750 for a period of six months.
The placement is a highly significant transaction given the company's size.
Transaction Structure
Placement price: NIS 610 per share
Warrants: One warrant for every two shares
Exercise price: NIS 750
Exercise period: 6 months
Immediate dilution: Approximately 7.48%
Fully diluted impact: Approximately 10.31%
The warrants are currently out of the money, creating a clear incentive for participants to support the share price above NIS 750.
The participants include institutional investors and qualified investors, some of whom are existing significant shareholders. This is not a retail capital raise, but rather smart institutional capital entering the company.
Why Is This a Strategic Move?
A Dramatic Strengthening of the Balance Sheet
Despite starting from an already strong balance sheet, the addition of approximately NIS 225 million to the company’s cash position meaningfully changes its financial flexibility.
This enables:
Larger-scale inventory purchases
Improved negotiating leverage with suppliers
Shorter delivery times for customers
The ability to capitalize on market opportunities
Improved Capital Markets Profile
An increase in free float, alongside the entry of meaningful institutional investors, leads to higher liquidity, broader analyst coverage, and an overall improvement in the quality of the shareholder base.
Potential Inclusion in the TA-90 Index
A move of this magnitude increases market capitalization, improves liquidity, and reinforces institutional ownership.
All of these are critical criteria in index rebalancing processes.
In addition, the very existence of out-of-the-money warrants creates a clear incentive to support the market price. In other words, participants are incentivized to continue purchasing the company’s shares in the open market, increase their holdings, reduce the available free float, and naturally push the share price higher.
We have seen similar structures in the past, including Next Vision, Tel Aviv Stock Exchange Ltd., Navitas Petroleum, and others, some of which I have previously covered in the newsletter and on X.
In those cases, the entry of high-quality institutional capital reshaped the ownership structure and led to meaningful long-term value creation. I have written several times about the theory of shareholder rotation and the entry of new investors, including in the context of QualiTau.
Operational Angle
QualiTau operates in an industry where inventory availability and delivery times are critical.
Available capital enables:
Early-stage production
The build-up of strategic inventory
Greater responsiveness to large orders
Strengthening its position with global customers
This is not a defensive capital raise.
This is a growth-oriented capital raise.
The Drawback / Risk
A dilution of approximately 7.5% is not negligible (10.3% including warrants).
If the market does not provide support, the warrants may expire unexercised.
Continued dependence on a strong order intake trajectory.
In my view, while there is dilution and the event may be interpreted negatively in the short term, capital coming from institutional investors typically signals forward-looking confidence.
Bottom Line (Private Placement)
