Intel Eyes Significantly Lower Valuation in IPO of Mobileye Unit
Intel Corp.
INTC 1.97%
is eyeing a significantly lower valuation than previously expected in the initial public offering of its Mobileye Global Inc. self-driving car unit, according to people familiar with the matter, in the latest sign of the beleaguered state of the new-issue market.
Mobileye, which was originally expected to land a roughly $50 billion valuation, is now set to target one of under $20 billion and sell a smaller number of shares than originally planned, the people said. By selling fewer shares at a lower price, the company and its advisers are hoping to drum up interest that will push up the shares after they start trading, some of the people said.
In another sign of the challenges facing the offering, Mobileye plans to launch its roadshow for prospective investors on Tuesday, a day later than anticipated.
Intel last month filed publicly for an IPO of Mobileye and is expected to detail its new valuation expectations Tuesday. The goal is still for the shares to begin trading Oct. 26, the people said.
The deal is a test of the beleaguered IPO market, which has been hit hard by rising inflation and interest rates, fears of a recession and plummeting stock prices, especially for Mobileye’s technology-company peers.
The U.S. IPO market is having one of its worst years on record, with traditional offerings on track to raise the least money since at least 1995, according to Dealogic. Major U.S. indexes are all in bear markets, defined in Wall Street parlance as a decline of 20% or more from a recent high. Also deterring new listings: The majority of companies that went public in 2020 and 2021 are trading below their IPO prices, many far below.
Intel Chief Executive
Pat Gelsinger
has said that listing Mobileye would give the self-driving car unit a higher profile and attract more business. He has also said Intel doesn’t need the money Mobileye’s IPO would generate.
Intel will retain a large stake in Mobileye, including all of the Class B shares Mobileye plans to issue, it has disclosed. Each Class B share will have voting rights equivalent to 10 Class A shares.
Mobileye had $854 million in revenue for the first six months of its fiscal year, up 21% from the year-earlier period. The company had a net loss of $67 million.
It is the second IPO in less than a decade for Mobileye, which first went public in 2014 at a roughly $5 billion valuation. Intel acquired the Israeli company in 2017 for $15.3 billion.
Goldman Sachs Group Inc.
and
Morgan Stanley
are leading the offering.
Write to Corrie Driebusch at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Intel Corp.
INTC 1.97%
is eyeing a significantly lower valuation than previously expected in the initial public offering of its Mobileye Global Inc. self-driving car unit, according to people familiar with the matter, in the latest sign of the beleaguered state of the new-issue market.
Mobileye, which was originally expected to land a roughly $50 billion valuation, is now set to target one of under $20 billion and sell a smaller number of shares than originally planned, the people said. By selling fewer shares at a lower price, the company and its advisers are hoping to drum up interest that will push up the shares after they start trading, some of the people said.
In another sign of the challenges facing the offering, Mobileye plans to launch its roadshow for prospective investors on Tuesday, a day later than anticipated.
Intel last month filed publicly for an IPO of Mobileye and is expected to detail its new valuation expectations Tuesday. The goal is still for the shares to begin trading Oct. 26, the people said.
The deal is a test of the beleaguered IPO market, which has been hit hard by rising inflation and interest rates, fears of a recession and plummeting stock prices, especially for Mobileye’s technology-company peers.
The U.S. IPO market is having one of its worst years on record, with traditional offerings on track to raise the least money since at least 1995, according to Dealogic. Major U.S. indexes are all in bear markets, defined in Wall Street parlance as a decline of 20% or more from a recent high. Also deterring new listings: The majority of companies that went public in 2020 and 2021 are trading below their IPO prices, many far below.
Intel Chief Executive
Pat Gelsinger
has said that listing Mobileye would give the self-driving car unit a higher profile and attract more business. He has also said Intel doesn’t need the money Mobileye’s IPO would generate.
Intel will retain a large stake in Mobileye, including all of the Class B shares Mobileye plans to issue, it has disclosed. Each Class B share will have voting rights equivalent to 10 Class A shares.
Mobileye had $854 million in revenue for the first six months of its fiscal year, up 21% from the year-earlier period. The company had a net loss of $67 million.
It is the second IPO in less than a decade for Mobileye, which first went public in 2014 at a roughly $5 billion valuation. Intel acquired the Israeli company in 2017 for $15.3 billion.
Goldman Sachs Group Inc.
and
Morgan Stanley
are leading the offering.
Write to Corrie Driebusch at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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