Mobileye Global, an Intel-owned self-driving technology company, raised $861 million in its initial public offering, sources said. The timing of the company’s IPO is unusual, as the recent volatility in the U.S. capital markets has caused many new companies to cancel their IPO plans.
Mobileye Global, an Intel-owned self-driving technology company, raised $861 million in its initial public offering, sources said. The timing of the company’s IPO is unusual, as the recent volatility in the U.S. capital markets has caused many new companies to cancel their IPO plans.
Based on the final offering price, Mobileye was valued at $16.7 billion. Intel had previously hoped that Mobileye would achieve a high valuation of $50 billion.
In the initial public offering of new companies in the U.S., companies reportedly sell 10% to 20% of their equity to investment institutions, but Mobileye only sold a % stake this time. The less-than-high valuation, coupled with the limited number of shares sold, limits Mobileye’s various size metrics for this IPO.
As of now, Mobileye officials have not commented.
According to Dealogic, a specialist firm that tracks IPO transactions in the U.S. capital markets, the U.S. IPO market is currently at one of its all-time lows, with the total amount of IPO financing for new companies this year set to be the lowest in the past 20 years.
The Renaissance IPO Index, which tracks U.S. initial public offering transactions, has plunged 51.3 percent this year, and for reference, the U.S. Standard & Poor’s 500 Index is down 19.54 percent.
The Cboe Volatility Index, which is used to measure the level of fear among U.S. Wall Street investors, recently stopped at a level of 29. Traditionally, this index exceeds 20, indicating that Wall Street investors have become seriously anxious about the recent performance of the U.S. stock market.
This year, many companies have canceled their IPOs due to severe volatility in the U.S. capital markets. As recently as October, Instrcart, a U.S. fresh food delivery company, canceled its plans to go public this year.
As for Mobileye’s choice to go public at this particular time, Intel CEO Kissinger explained that the IPO is significant for Mobileye and will “bring the company to market.
According to Mobileye’s SEC filing, Intel will still hold a large stake in Mobileye in the future, including all of the subsidiary’s “Class B common stock” that it intends to issue in the future. It is reported that, by design, Mobileye’s Class B common stock will have the equivalent of 10 shares of Class A common stock per share.
In the first half of the fiscal year, Mobileye reported sales of $854 million, an increase of 21 percent compared to the same period last year. However, the company still maintained its losses, which totaled $67 million for the first half of the year.
It’s worth noting that this isn’t the first time Mobileye has gone public; the company was valued at about $5 billion when it first went public in 2014, but in 2017 it was wholly acquired by Intel, which coveted the self-driving car market.
Mobileye’s shares will be traded on the Nasdaq stock market under the symbol “MBLY” on Wednesday local time.
Goldman Sachs Group and Morgan Stanley & Co. are said to be the lead underwriters in the IPO.
