In a cool IPO market, intel (INTC) to spin off Mobileye at less than a third of its original value. Intel stock rose on the news Monday.
Mobileye’s IPO will be rated late Tuesday and traded on Wednesday. It’s now offering 41 million shares at $18 to $20 a share, which would fetch $820 million at the top end of its range, but it’s not clear if that price will be maintained. 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 for $15.3 million five years ago, not far below its current target valuation for this week’s IPO.
Intel shares are up 1% to nearly 27.20 in morning trading in the stock market today.
Drastic slowdown in IPOs
Mobileye’s valuation stands in sharp contrast to 2021, when it was originally valued at roughly $50 billion. That was slashed to $30 billion earlier this year.
The decline reflects the sharp slowdown in IPOs this year, in what Renaissance Capital says is its worst performance since 2008. Other factors include rising inflation and high interest rates.
Mobileye develops and produces advanced driver assistance systems and autonomous driving technologies. According to Mobileye’s IPO prospectus, competitors are among them Apple (AAPL), Sony, Waymo and Tesla (TSLA).
According to Mobileye, more than 117 million vehicles have been equipped with its technology.
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 last year. It showed a net loss of $67 million.
The offering would be the biggest tech IPO this year. Lead underwriters are Goldman Sachs and Morgan Stanley.
Recently, German Volkswagen spun off its Porsche business. Another big tech company that should file for an IPO this year is online grocery company Instacart.
In March, Instacart cut its valuation from $40 billion to $24 billion. However, Instacart has reportedly decided not to go public this year.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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