Shares in Mobileye, Intel’s autonomous vehicle business, climbed 30% Wednesday following an initial public offering.
The deal raised $861 million when shares priced Tuesday at $21 billion, a little above the forecast range. Bloomberg reported it’s the best large stock debut in the U.S. this year.
Shares were trading at $27.38 late Wednesday morning, giving Mobileye a market value above $21 billion. That’s a solid return on the $15 billion Intel paid for the Israeli business in 2017, but far below the $50 billion valuation Intel hoped for when it announced plans to take Mobileye public last year.
Intel retains a majority stake in the business and so its return could grow if market conditions improve and if Mobileye’s technology proves popular. And most proceeds from the IPO will accrue to Intel, which could receive a dividend of up to $3.5 billion from Wednesday’s offering.
Mobileye’s strong debut did little for Intel’s stock on Wednesday, however. Intel shares were down 10 cents in morning trading at $27.31.
Intel is Oregon’s largest corporate employer, with 22,000 assigned to its campuses in Washington County. But Intel focuses on chip engineering and manufacturing in Oregon and the Mobileye part of the business has little presence locally.
Intel reports third-quarter results Thursday amid a steep slowdown in demand for its chips in PCs and data centers. The company appears poised to lay off staff to reduce expenses, warning employees last week that “Our costs are too high and our margins are too low.”
News Source Link
