Intel Corp. is reported to be reducing its planned valuation for the initial public offering its Mobileye Global Inc. self-driving car unit amid an ongoing slump in public stock listings.
The Wall Street Journal, citing people familiar with the matter, reported today that Mobileye, first reported in March to be going public at a $50 billion-plus valuation, has had its IPO valuation cut to under $20 billion. The most recent figure for Mobileye’s IPO was a valuation of $30 billion on Oct. 3.
Intel is also said to be planning to sell fewer shares in the IPO than originally planned. The idea behind holding back Mobileye stock is claimed to be part of a plan by Intel and its advisers to drum up interest that will push up the shares after they start trading.
Mobileye is also said to have delayed a launch for its investor roadshow until Tuesday, a day later than anticipated. Though not outright stated, it’s hinted that Intel was delaying starting the roadshow in light of market conditions, with the decision to proceed boosted by a surge in markets today.
Coming into its IPO, Mobileye had $879 million in sales in 2019, $967 million in 2020 and $1.39 billion last year. Over the same time period, losses have shrunk from $328 million to $75 million per year. Revenue for the first half of this year rose 21% from a year ago, to $754 million.
Mobileye develops technology that powers camera systems used by autonomous and semi-autonomous vehicles. The company leverages leading technology, including artificial intelligence, deep learning and crowdsourcing, to create hardware and software for use by automakers. The company’s clients include BMW AG, Audi AG, Volkswagen AG, Nissan Motor Co. Ltd., Honda Motor Co. Ltd. and General Motors Co.
Amid ongoing economic turmoil and the war in Ukraine, initial public offerings have slumped through 2022. According to the latest quarterly PitchBook-NVCA Venture Monitor report, 2022 has produced only 60 public listings for the first nine months of 2022, a year after a record 303 VC-backed public listings generated $670 billion. The same report warned that this year’s total exit value is in danger of falling below $100 billion for the first time since 2016.
It’s that market in which Intel is attempting to float Mobileye. Its product and financials are fairly solid compared with many tech startups, but it will be a hard sell in a market that is skittish when it comes to tech companies, especially as a global recession looks increasingly likely in 2023.