How to buy shares in Mobileye

Mobileye ($MBLY) has begun trading on the NASDAQ after offering 41 million shares at US$21 a piece. 

It’s using the same ticker code it had when it was acquired by Intel five years ago for US$15.3b – not far below the current valuation of US$16.7b. But that’s a far cry from 2021 when the company was valued at US$50b before being cut down to US$30b earlier this year. 

The drops reflect the drastic slowdown of the U.S. IPO market, which is on track for its worst performance in over 30 years. 

Regardless, Intel Corp’s ($INTC) chief executive Pat Gelsinger has said the IPO is not a capital raise but an entry into the market. 

The CEO told the WSJ Tech Live conference, ‘The autonomous vehicle segment is a strong segment for growth. It's a tough market. At the same time, we believe this company should be public and this is the best way to maximize the company's potential.’ 

In saying that, Intel will receive the bulk of the proceeds from the offering. Promising to make sure that Mobileye has $1b in cash and equivalents, the chip maker will take the surplus.

Since Intel purchased Mobileye, the company’s revenue has grown nearly seven times to over US$1.39b in 2021.

The company itself develops and makes advanced driver-assistance systems and autonomous driving technologies. Its prospectus says competitors include Apple, Sony and Tesla. 

Currently over 117 million vehicles have been equipped with its technology, with revenue up 21% year-on-year. Losses have been narrowed over the last three years from US$328m in 2019 to US$75m in 2021.

The company will use the net proceeds to fund operating capital and corporate objectives, as well as repaying a portion of its debt to Intel. 

To keep up with competitors, Mobileye has pledged to spend up to US$23b this year alone to create new chip facilities. 

Mobileye is available to trade now on Stake under the ticker $MBLY.