Amnon Shashua, President and Chief Executive Officer of Mobileye Global Inc., and Patrick Gelsinger, Chief Executive Officer of Intel Corp., at the Nasdaq MarketSite during the company’s IPO in New York, U.S., on Wednesday, October 26, 2022.
Michael Nagel | Bloomberg | Getty Images
Shares of Mobileye rose more than 30% in its IPO on Wednesday after the self-driving car technology maker spun off from Intel.
In a year without any significant tech IPOs in the U.S., Mobileye offers investors a chance to get into growth areas. But it’s not a new name for the market.
Mobileye was publicly traded before Intel bought the Israeli company for $15.3 billion in 2017. At its $21 IPO price, Mobileye was valued at just $17 billion, resulting in minimal gains for Intel so far. The stock, which trades under the ticker MBLY, rose to $27.85 on Wednesday.
Intel will retain control of Mobileye and hold over 750 million Class B shares, with 10 times the voting power of Class A shares. The company said in an Oct. 18 filing that it expects the offering to cost between $18 and $20 per share.
The IPO raised $861 million, and the move to list Mobileye on Nasdaq is part of Intel’s broader strategy to turn around its core semiconductor business, which has lagged behind peers like AMD and Nvidia in recent years. Intel said it will use some funds from the Mobileye listing to build more chip factories as it embarks on a capital-intensive process to become a foundry for other chipmakers.
However, Mobileye’s market cap is well below Intel’s earlier expectations, in the latest sign that tech investors are calming down on IPOs and readjusting their valuations from the frothy days of the last half decade as interest rates rise and the economy is slowing down.
Founded in 1999, Mobileye works with Audi, BMW, Volkswagen, GM and Ford to develop advanced driving and safety features such as driver assistance and lane keeping using the company’s “EyeQ” camera, chips and software. Mobileye CEO Amnon Shashua said in the IPO filing that 50 companies are currently using the company’s technology in 800 vehicle models.
Revenue rose 41% to $460 million in the second quarter. The net loss decreased from $21 million to $7 million.
Class A shares are what investors will buy at the IPO, and Intel expected 46.26 million Class A shares to be outstanding, with the potential for more if the underwriters decide to exercise their option to purchase additional shares.
Intel shares were down slightly on Wednesday, down about 47% of their value this year, while the Nasdaq is down 29%.
— CNBC’s Kif Leswing contributed to this report.
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