About a year ago, Intel announced that it intended to issue Mobileye, which it purchased in 2019 for about $15 billion, on the stock exchange as an independent company. The Israeli high-tech company, which to this day is considered the largest exit of an Israeli company, was meant to go public for $50 billion – but according to a new report, this amount is significantly far from what the company will be issued in the end.
Value cut by 60%
Two weeks after submitting an IPO prospectus, in which it did not specify the amount it intends for its IPO, the Wall Street Journal reported that Mobileye is expected to issue at a value of $20 billion or even less. This is a sharp cut– about 60% of what the value was when Intel announced its plans for an IPO.
According to the report, as part of the IPO, Mobileye will sell far fewer shares than its original plan, and at a lower price per share. According to sources familiar with the matter, this type of decision is intended to try and generate interest in Mobileye's stock once it starts trading - which will lead to an increase in its price and the value of the company.
The Wall Street Journal reports that Intel and Mobileye plan to start the roadshow, with presentations of the company to future investors, to stimulate interest in it just before the IPO, which is expected to happen on October 26, 2022.
The significantly different market situation now compared to 2021, when Intel announced its desire to issue Mobileye as an independent company, led to the postponement of the offering. According to sources familiar with the matter who spoke with the Wall Street Journal, the fact that the market has presented a more positive picture in recent days has led Intel and Mobileye to move forward with the IPO, in hopes that the positive trend will continue until Mobileye enters the stock market.
The worrying trend
One of the more worrying trends regarding Mobileye's IPO is that of similar auto-tech companies that have been issued in the past year. According to a new study by Crunchbase, the companies in the field present a very bleak picture – including some Israeli companies. According to the study, the Israeli otonomo, which was issued in August 2021 at a value of $1.4 billion managed to erase $1.36 billion from its value as it is only worth about $40 million today. This is a 97% cut in the value of the company. Two other Israeli companies that issued and cut their value, are Inviz - which also issued for $1.4 billion and is now valued at $655 million; and Arbe which issued at a value of $525 million and is now only valued at $359 million.
According to Crunchbase, from the 14 companies from the field that went public, there was a total decrease of 81% in their value once traded on the stock exchange which equates to a total loss of $41 billion from their original value.
Feature photo credit: Intel