Intel-owned Mobileye to go public at $21 per share, with a $17B valuation

EMERGING TECH

Mobileye Global Inc., the Intel Corp.-owned self-driving car technology company, is set to go public tomorrow, Oct. 26, at $21 per share in an initial public offering that had been expected by some to be priced at between $18 and $20 per share.

Although some reports go as far as claiming that the higher-than-expected share price is a “rare positive development for the U.S. listings market,” the IPO price values Mobileye at $17 billion, well down from $50 billion-plus expected in March. Even as recently as Oct. 3, Mobileye was predicted to go public at a valuation of $30 billion.

In a statement, Mobileye said it will offer 41 million shares at the list price of $21. Underwriters to the offering are being granted a 30-day option to purchase an additional 6.15 million shares of Class A common stock at the IPO price. Mobileye also added that it had entered an agreement to sell 4,761,905 shares of Class A common stock in a private placement to General Atlantic, with gross proceeds of $100 million.

Mobileye develops technology that powers camera systems used by autonomous and semi-autonomous vehicles. The company offers technology that includes artificial intelligence, deep learning and crowdsourcing to create hardware and software for use by automakers. The company’s clients include BMW AG, Audi AG, Volkswagen AG, Nissan Motor Co. Ltd., Honda Motor Co. Ltd. and General Motors Co.

Coming into its IPO, Mobileye had $879 million in sales in 2019, $967 million in 2020 and $1.39 billion last year. Over the same time period, losses have shrunk from $328 million to $75 million per year. Revenue for the first half of this year rose 21% from a year ago, to $754 million.

A company that was expected to have a valuation of $50 billion going public at $17 billion would, in most years, be perceived as a negative, but 2022 isn’t most years. Russia’s invasion of Ukraine, a technical recession and 40-year high inflation with seemingly no end in sight has resulted in a macroeconomic environment that hasn’t been seen in a generation.

As noted in the most recent PitchBook-NVCA Venture Monitor report, IPOs in 2022 have nearly fallen off a cliff, with 60 in the first nine months of the year compared with 303 last year. The glory days of big tech floats have passed, and PitchBook predicts that the amount raised in public offerings this year will likely to drop below $100 billion for the first time since 2016.

Mobileye will go public at the ringing of the bell on the Nasdaq at 9:30 a.m. EDT Wednesday morning.

Photo: Intel