Intel Mulls Lower Valuation For Mobileye IPO – Report

The Intel-owned autonomous vehicle technology firm Mobileye Global could experience a “significantly lower” valuation for its initial public offering (IPO), when it eventually happens.

The Wall Street Journal (citing people familiar with the matter) reported that Intel is eyeing a valuation that is significantly lower than previously expected for the floatation of Mobileye, which was founded back in 1999.

Intel is committed to compete in the autonomous vehicle sector, after it carried out the biggest technology takeover in Israel’s history, with the $15.3 billion acquisition of driverless car specialist Mobileye back in 2017.

Mobileye division

In December last year Intel announced its intention to take its Mobileye unit public in the US, sometime in mid 2022.

Intel said at the time the intended IPO of newly issued Mobileye stock “will unlock the value of Mobileye for Intel shareholders by creating a separate publicly traded company and will build on Mobileye’s successful track record and serve its expanded market.”

Intel also said at the time that it fully intends to remain the majority owner of Mobileye, and the two companies would continue as strategic partners, collaborating on projects as they pursue the growth of computing in the automotive sector.

It should be noted that any floatation will be the second time that Mobileye has braved the public markets.

Mobileye originally went public in 2014, but returned to private ownership when it was acquired by Intel in 2017.

Intel said in December that a final decision on the IPO and its conditions and ultimate timing would be subject to market conditions.

Public listing

Fast forward ten months, and the Wall Street Journal reported this week that Mobileye has originally been expected to land an approximate $50 billion valuation.

But now Mobileye is reportedly set to target a valuation that is under $20 billion. It will also sell a smaller number of shares than originally planned, the people reportedly 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 reportedly said.

Mobileye last month unveiled its filing for a US IPO with plans to list shares on Nasdaq under the ticker “MBLY”.

It is still aiming for the shares to begin trading on 26 October, WSJ reported.

The lower valuation underscores the downturn for new listings, with the tech IPO market facing its worst drought in nearly two decades.

Intel is slated to report its third-quarter results on 27 October, when the chipmaker is expected to post a drop in revenue, amid a slump in the PC market and supply-chain issues.

In February this year it was reported that Mobileye planned to work with partners to build and deploy self-driving electric shuttles in the US in 2024.

Executives consider electric shuttles a way for Mobileye to expand its automated driving system beyond taxis and delivery vehicles.