Mobileye climbs more than 30% in IPO after exiting Intel

Amnon Shashua, chairman and CEO of Mobileye Global Inc., and Patrick Gelsinger, CEO of Intel Corp., outside the Nasdaq MarketSite during the company’s IPO in New York, USA on Wednesday, October. 26, 2022.

Michael Nagle | Bloomberg | Getty Pictures

furniture Shares soared more than 30% on Wednesday after the tech maker for self-driving cars pulled out of the market. Intel.

In a year of no major tech IPOs in the US, Mobileye offers investors an opportunity to tap into a growth area. But it is not a new name for the market.

Mobileye was publicly traded before Intel bought the Israeli company for $15.3 billion in 2017. At an IPO price of $21, Mobileye was worth just $17 billion, making it the minimum gain for Intel so far. The stock, which trades under the code MBLY, rose to $27.85 on Wednesday.

Intel will retain control of Mobileye and hold over 750 million shares of Class B stock, which has 10 times the voting power of Class A stock. The company said in October. 18 reported that it expects the offer to be priced between $18 and $20 per share.

The IPO raised $861 million, and its move to list Mobileye on the Nasdaq prompted Intel’s AMD and Nvidia in recent years. Intel said it will use some funds from its Mobileye listing to build more chip factories as it enters a capital-intensive process to become a foundry for other chip makers.

However, Mobileye’s market cap is well below Intel’s previous expectations, the latest sign that tech investors have cooled off from IPOs and readjusted their valuations from the bubbling days of the past half-decade as interest rates rose and the economy slowed.

Founded in 1999, Mobileye has partnered 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.

In the second quarter, revenue increased 41% to $460 million. Net loss fell from $21 million to $7 million.

Class A stock is what investors would buy in an IPO, and Intel expected 46.26 million Class A shares outstanding, and it has more potential if insurers decide to exercise their option to buy additional shares.

Intel shares fell slightly on Wednesday, losing 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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