Intel Plans Potential $50 Billion IPO For Its Israeli Self-Driving Car Unit, Shares Rise

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Top Line

Shares of chipmaker giant Intel, which has largely underperformed so far this year, rose 4% on Tuesday after the company announced plans to take its self-driving car unit public at a potential $50 billion valuation in 2022. increased more.

important facts

The tech giant said it will take its self-driving car firm, Mobileye, publicly next year at a potential valuation of more than $50 billion, sources first said wall street journal,

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Intel originally acquired a 100% Israeli company in 2017 for $15.3 billion, but valuations for self-driving car companies — like electric vehicle makers — have skyrocketed in recent years amid huge investor interest. .

With the two companies continuing as strategic partners, the chipmaker intends to retain majority ownership in Mobileye, according to one company. Press release Monday.

Intel shares, which have tumbled substantially in recent years, jumped as much as 8% on the news before turning some of the gains — with the stock currently up nearly 4% on Tuesday.

Intel CEO Pat Gelsinger, who took the top position in February, said in a statement that Mobileye’s annual revenue is expected to grow more than 40% in 2021.

Mobileye’s planned public offering is Gelsinger’s latest attempt to turn the company around and expand into new markets, as Intel faces investor pressure after several years of subdued performance.

Important Quote:

“Intel’s acquisition of Mobileye has been a huge success. An IPO provides the best opportunity to build on Mobileye’s track record for innovation and unlock value for shareholders,” Gelsinger said.

Shocking fact:

Intel stock is up more than 6% so far in 2021, rising slightly but underperforming other chipmakers like Nvidia, which has seen shares rise 140% this year.

What to look for:

According to CFRA analyst Angelo Zino, “We think the move makes sense as it focuses on Intel’s core business and raises capital.” He argues that the move will unlock shareholder value “given the appetite of the investment community within this category.” “Despite the near-term catalysts, we are working hard to be upbeat on the Intel story given ongoing share losses, margin compression, uncertain PC landscape and higher capex spending needs.”

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