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Mobileye gains more than 30% in IPO after spinning out of Intel

Amnon Shashua, president 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, U.S., Wednesday, Oct. 26, 2022.

Michael Nagle | Bloomberg | Getty Images

Mobileye shares fell more than 30% in their debut on Wednesday after the self-driving car technology maker was spun out of Intel.

In a year that hasn’t seen any significant tech IPOs in the US, Mobileye is offering investors an opportunity to get in on growth territory. But it is not a new name for the market.

Mobileye went public before Intel bought the Israeli company in 2017 for $15.3 billion. At its $21 IPO, 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 shares of Class B common stock, which has 10 times the voting power of Class A common stock. The company said in an Oct. 18 filing that it expected the offering to be priced 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 rivals such as AMD and Nvidia in the later years. Intel said it would 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 value is well below Intel’s earlier expectations, the latest sign that tech investors have cooled on IPOs and adjusted their valuations from the frothy days of the past half-decade as interest rates rise and the economy slows.

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 that 50 companies currently use the company’s technology across 800 vehicle models.

Revenue in the second quarter rose 41% to $460 million. Net loss reduced to $7 million from $21 million.

Class A shares are what investors will buy in the IPO, and Intel expected there to be 46.26 million Class A shares outstanding, with the potential for more if the underwriters decide to exercise their option to buy more shares.

Intel shares fell slightly on Wednesday and have lost about 47% of their value this year, while the Nasdaq is down 29%.

— CNBC’s Kif Leswing contributed to this report.

SEE: Intel plans to cut thousands of jobs due to PC slowdown

Mobileye gains more than 30% in IPO after spinning out of Intel

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