WSJ News Exclusive | Intel Prices Widely Anticipated IPO for Self-Driving Car Unit Mobileye
Intel Corp.’s
INTC 0.85%
self-driving car unit Mobileye Global Inc. priced its initial public offering at $21 a share, a dollar above the top of its targeted range, according to people close to the deal.
Mobileye raised $861 million by selling 41 million shares, valuing the company at roughly $17 billion, the people said. That is more than the $15.3 billion that Intel paid for the Mobileye in 2017 but a far cry from the $50 billion or more that the chip giant originally set its sights on when it unveiled plans for the listing late last year.
The Wall Street Journal previously reported that Intel was expected to price the IPO at or above the top of its targeted range of $18 to $20 a share.
Pricing any IPO right now is tricky given the parlous state of the market. Sharp swings in major stock indexes as interest rates barrel higher have hammered the IPO market in 2022. IPOs in the U.S. had raised only $7.4 billion so far this year, putting 2022 on track to be the worst year for new issues in decades, according to Dealogic.
Technology companies broadly have been among the hardest-hit sectors over the past 12 months, with the Nasdaq Composite down 26% from this point last year compared with the S&P 500’s roughly 15% loss. Driverless-car technology was in hot demand several years ago, but that has cooled. Mobileye faces stiff competition, including from Google parent
Alphabet Inc.’s
Waymo and
Amazon.com Inc.’s
Zoox.
Intel and underwriters overseeing the deal were determined to plow forward with the IPO, expected to be the last major listing of the year, with the chip maker’s Chief Executive
Pat Gelsinger
having said that Intel doesn’t need the money that the Mobileye offering would generate. Listing Mobileye would give the self-driving car unit a higher profile and attract more business, he has said.
To get the deal done, Intel adjusted its offering, selling fewer shares than planned—representing only about 5% to 6% of those that will ultimately be outstanding. It lined up what are known as cornerstone buyers for roughly 40% of the deal.
Intel and the underwriters have been aided somewhat by a strong market in recent days, with the tech-stock heavy Nasdaq index up about 8.5% since Oct. 14, including a more than 2% surge Tuesday.
Executives and underwriters are keen for the shares to trade well, so they were mindful of not pricing them too high.
Mobileye is set to start trading Wednesday on the Nasdaq stock exchange under the symbol MBLY.
Write to Corrie Driebusch at [email protected]
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