Pending Mobileye IPO Might See Bumpy Road Ahead

For Intel’s Mobileye unit, we’ll have to wait a bit to get a peek at company-specific financials.

As reported Monday (March 7), the chip giant has filed with the Securities and Exchange Commission to take the self-driving vehicle operations public.

The filing is confidential, Intel said in a statement Monday.

That means we don’t know just when, or where the initial public offering (IPO) might be — or for how much, but Mobileye might be valued at $50 billion, according to various news outlets.  That implied “price tag” would be a far sight higher than the $15.3 billion Intel shelled out for the company back in 2017.

The decision to take Mobileye public is not really a surprise — and had been remarked upon in this space as recently as the end of 2021.

Read also: Mobileye IPO Paves Way for Wall Street Bets on Autonomous Vehicles

There are at least some data points here and there in the mainstream press. Mobileye logged $1.4 billion in top line in 2021, roughly 40% higher than 2020, The Wall Street Journal said.

Mobileye itself notes on its site that more than 100 million vehicles across the globe are equipped with the company’s technology, which, housed in chips and sensors, helps vehicles autonomously and automatically navigate various environments. The company also has an advanced driver assist system to its client firms, which include automakers as diverse as Nissan and GM.

Beyond the financials themselves, we note that the sheer act of taking Mobileye public signals a few things:

Intel is betting that the markets — the public ones and the general environment for autonomous vehicle tech — are still ripe for gains. Intel intends to maintain skin in the game, so to speak, by maintaining a majority stake in the company, and by reportedly receiving the majority of proceeds from the sale. With a majority stake, earnings and cash flow would still accrue to Intel, and a buoyant equities market would boost the value of the holdings on the chip giant’s balance sheet.

But amid the continued volatility in the investing world (which would buffet the stock when it does come public), and with supply chain constraints still in place, there may be at least some speed bumps in place for new IPOs and for the development of self-driving cars. Those speed bumps might well prove temporary and the trend toward the connected economy — and the place of “smarter vehicles” within the connected economy — is a significant one.

Increasing Connected Economy Ranks

A Mobileye IPO would swell the ranks of the Connected Economy Stock Index — where there are 100 names at present, and all else being equal, we’d add the newly public firm to the roster.  The autonomous vehicle firm would take up residency in the “Move” Index, which has lost ground every single week this year since its debut at the beginning of 2022.  Past is not necessarily prologue, but a true market meltdown, should it come to pass in the days and weeks and months ahead, would have a chilling effect on IPOs across all manner of verticals.