© Stocksak. FILE PHOTO – The Mobileye logo can be seen at the Munich Auto Show, IAA Mobility 20,21 in Munich, Germany, September 7, 2021. REUTERS/Wolfgang Rattay/File Photo
By Echo Wang
NEW YORK (Stocksak), -Mobileye Global Inc., the self-driving unit at chip maker Chipmaker Intel Corp (NASDAQ:), raised $861 Million in an initial public offer (IPO), overcoming the trading volatility that has thwarted stock markets hopefuls, the company announced Tuesday.
Mobileye stated in a press statement that it had priced 41 million shares at $21 each share. Mobileye had previously suggested that the IPO could be priced between $18 to $20 per share.
Mobileye is valued at $16.7 Billion, a far cry of the $50 Billion valuation Intel initially hoped to achieve.
Mobileye is only selling a 5% stake, which is less than the usual 10% to 20% stake for most IPOs. Because it is less valued, this limits the financial impact it will take.
According to Dealogic, which tracks listing data back to 1995, the U.S. IPOs are experiencing one of their worst years. Traditional offerings are on track to raise less money than in over 20 decades. The Renaissance IPO index, which is the largest and most liquid U.S IPOs this year, has dropped 51.4%, compared to the’s drop by 19.54%.
The Cboe Volatility Index is Wall Street’s fear gauge. It hovers around 29. Readings above 20 are usually associated with increased investor anxiety about the near future outlook for stocks.
Volatility in capital markets has caused hundreds of companies to delay IPO plans. Instacart, a grocery delivery startup, abandoned plans to go public in October.
Pat Gelsinger, Intel’s Chief Executive Officer, has defended Mobileye’s decision for an IPO. He said that it was a way to “move Mobileye into (the market).”
According to a filing with U.S. Securities and Exchange Commission, Intel will retain a large share, including all Class B shares Mobileye plans on issuing. Each Class B share will have voting rights equal to 10 Class-A shares.
Mobileye’s first six months of fiscal year saw a revenue of $854 million, an increase 21% over the same period last year. The company reported a net loss in the amount of $67 millions.
Mobileye was first listed in 2014 with a valuation of $5 billion. Intel purchased it in 2017 for $15.3 billion.
Mobileye’s shares will start trading on Wednesday, March 26th on the Nasdaq under “MBLY”
Goldman Sachs Group Inc (NYSE 🙂 Morgan Stanley (NYSE:) is the leading underwriter for the offering.