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What Investors Should Know Before Intel’s Mobileye IPO
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What Investors Should Know Before Intel’s Mobileye IPO

Intel’s (INTC) Mobileye, its advanced driver-assistance systems (ADAS), and autonomous driving technologies unit will get listed on NASDAQ tomorrow under the symbol MBLY.

Mobileye’s SEC filing states that the business unit is offering 41 million common shares priced in the range of $18 to $20 per share and is looking at raising $820 million at the higher end of this range.

Following the initial public offer (IPO), Intel will own all the Class B outstanding shares representing around 99.4% of the “voting power of our common stock (or approximately 99.3% if the underwriters exercise their option to purchase additional shares of our Class A common stock in full)”

Mobileye’s Fall in Valuation

Last week, Mobileye stated that it was looking at a valuation of around $16 billion in its IPO, around 33% less than its earlier expectations.

Back in April, it was touted that the Mobileye could be valued at $50 billion.

According to a Reuters report, tech IPOs are at their lowest level since 2008 and have raised $507 million so far, citing Refinitiv data – the lowest amount raised through IPOs since 2000.

Why the Mobileye IPO Now?

As the timing of the IPO has raised eyebrows, Intel’s CEO Pat Gelsinger clarified on Monday at the WSJ Tech Live conference that this was not a “capital raise” for Intel, according to Reuters.

Gelsinger added, “The autonomous vehicle segment is a strong segment for growth. It’s a tough market. At the same time, we’re believing this company should be public and this is the best way to maximize the company’s potential.”

Interestingly, Mobileye’s SEC filing states that after this public offering, Mobileye’s parent company, Intel will “have $1.0 billion in cash, cash equivalents or marketable securities in accordance with the terms of the Master Transaction Agreement (as defined below).”

History of Mobileye

Mobileye was founded in 2009 by Prof. Amnon Shashua. In 2017, Mobileye was acquired by Intel for $15.3 billion in cash. Prior to its acquisition by Intel, the company had gone public in 2014 and was trading under the symbol ‘MBLY’ on the New York Stock Exchange.

Mobileye anticipates the current total addressable market (TAM) to be worth $16 billion “composed entirely of selected ADAS market opportunities” and to be worth $40 billion over the long term.

The company’s revenues grew 43% year-over-year in 2021 to $1.4 billion with net losses narrowing to $75 million from $196 million in 2020.

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