Intel Trims Self-Driving Unit Mobileye's IPO Valuation Yet Again, Could Detail New Terms Tuesday: WSJ

Intel Corporation INTC has trimmed the initial public offering valuation of its self-driving car unit Mobileye, underlining the struggles of the IPO market amid the sell-off seen in equities.

What Happened: Intel is now targeting a valuation under $20 billion and looking to sell fewer shares than it had planned originally, the Wall Street Journal reported, citing people familiar with the matter. The chipmaker and its advisers are of the view that selling fewer shares at a reduced price may generate increased interest in the IPO, added the report.

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The date for starting the roadshow for the offering has also been reportedly pushed back by a day. Notwithstanding, Intel expects Mobileye’s shares to begin trading on Oct. 26, the report said.

After holding out for some time amid trying market conditions, Intel decided to take the plunge following Monday’s rally, which saw major averages jump on expectations of a positive third-quarter earnings season.

Why It’s Important: Intel filed with the SEC a preliminary prospectus for the Mobileye IPO on Sept. 30, although it made public its intention to spin off the Israeli company late last year. 

Although Intel is yet to confirm the size and pricing of the IPO, initial reports said the company is shooting for a $50 billion valuation. It was reportedly trimmed to $30 billion by the time the company officially filed for the IPO.

The WSJ reported that Mobileye could amend its S-1 filing as early as Tuesday to include the size and pricing of the offering.

Mobileye, founded in 1999, had tapped the public market in the U.S. in 2014 only to be yanked off the Street following its acquisition by Intel in 2017 in a $15.3 billion deal. The company grew its revenue by 43% to $1.4 billion in 2021 and generated an adjusted profit of $474 million.

The U.S. IPO market is going through a lean patch this year and is on track to raise the least amount of proceeds since 1995 or before, the report said, citing data from Dealogic.

Price Action: Intel closed Monday’s session 1.97% higher at $26.42, according to Benzinga Pro data.