In a chilly market for initial public offerings, Intel (INTC) is set to spin off Mobileye at less than a third of its original value. Intel stock rose on the news Monday.
The Mobileye IPO will price late Tuesday and begin trading Wednesday. It’s now offering 41 million shares at $18 to $20 apiece, which would raise $820 million at the high end of its range, but it’s not clear whether that pricing will stay in place. Intel is targeting a valuation of $16 billion.
The company plans to list on the Nasdaq under the ticker MBLY. It’s the same ticker Mobileye had when Intel acquired it five years ago for $15.3 billion, not far below the current target valuation for this week’s IPO.
Intel stock climbed 0.8% to close at 27.18 on the stock market today.
Drastic Slowdown In IPOs
Mobileye’s valuation stands in sharp contrast with 2021, when it was initially valued at about $50 billion. That was cut to $30 billion earlier this year.
The drop reflects the drastic slowdown in IPOs this year, which is the worst performance since 2008, according to Renaissance Capital. Other factors include rising inflation and high interest rates.
Mobileye develops and makes advanced driver-assistance systems and autonomous-driving technologies. The Mobileye IPO prospectus says competitors include Apple (AAPL), Sony, Waymo and Tesla (TSLA).
More than 117 million vehicles have been equipped with its technology, Mobileye says.
Intel Stock: Mobileye Revenue Up 21%
For the six-month period ended July 2, Mobileye reported revenue of $854 million, up 21% from the same period a year ago. It showed a net loss of $67 million.
The offering would be the largest technology IPO this year. Lead underwriters are Goldman Sachs and Morgan Stanley.
Recently, Germany’s Volkswagen spun off its Porsche business. Another big tech company that was expected to file for an IPO this year is online grocery company Instacart.
In March, Instacart slashed its valuation to $24 billion, from $40 billion. But reports say Instacart has decided not to go public this year.
Editor’s Note: An earlier version of this story incorrectly stated the price Intel paid for Mobileye when it acquired the company five years ago. The correct price is $15.3 billion.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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