Mobileye Global (MBLY proposed), Intel’s self-driving car unit, is ready to cruise onto the IPO freeway this week with its $779 million deal – one of the most highly anticipated IPOs of the year. Mobileye’s IPO – 41.0 million shares at $18.00 to $20.00 – is set for pricing Tuesday night (Oct. 25, 2022) to trade Wednesday (Oct.26, 2022) on the NASDAQ.
Goldman Sachs and Morgan Stanley are leading the team of 10 joint book-runners, which includes Evercore ISI, Barclays, Citigroup, BofA Securities, RBC Capital Markets, Mizuho, Wolfe | Nomura Alliance and BNP PARIBAS.
If priced at the $19.00 mid-point, the IPO would give Mobileye a valuation of about $15.1 billion. That ticks up to $15.2 billion, after accounting for a $100 million private placement planned in conjunction with the IPO. That’s slightly less than what Intel paid for Mobileye five years ago.
“It’s a quality company – the cream of the crop – with Intel involved,” a veteran IPO investor says.
Entities affiliated with General Atlantic, an investment firm, have made a commitment to buy $100 million of Class A stock at the IPO price in the private placement, the prospectus says.
An Encouraging Sign
The U.S. stock market’s powerful rally on Friday could put some fuel in Mobileye’s tank. Stocks surged after the San Francisco Federal Reserve Bank’s Mary Daly said on Friday that maybe the Fed should start planning to reduce the size of its interest-rate increases. She added that although the market has priced in another 75-basis-point rate increase in November, “I would really recommend people don’t take that away as, it’s 75 forever.”
The Dow Jones industrial average shot up 748.97 points, or 2.5 percent, to end Friday at 31,082.56 – ending its best three-week period since November 2020 – as investors took heart from the chances of a slower pace of interest-rate increases and the recent batch of solid corporate earnings, according to The Wall Street Journal. The Dow, the S&P 500 and the NASDAQ Composite Index finished Friday’s session with weekly gains of at least 4.7 percent, the Journal noted, calling this “a reprieve after a prolonged period of volatility that has been marked by big swings for stocks and bonds around the globe.” The Dow and the S&P 500 wrapped up their best weeks since June, while the NASDAQ ended its best week since July, according to the Journal.
“It could be a pivot,” an experienced Wall Street pro said.
A better outlook for the U.S. stock market would give IPO investors another reason to get excited about Mobileye’s IPO, he said.
This will be Mobileye’s second time around as a publicly traded company. Mobileye, an Israeli company, went public in 2014 and traded under the symbol “MBLY” on the New York Stock Exchange until Intel bought the company for $15.3 billion in 2017. Mobileye recently reclaimed “MBLY” as its proposed stock symbol for its NASDAQ-listed IPO.
Mobileye will use part of the IPO proceeds to repay some of its debt to Intel.
After the IPO, Intel will still control Mobileye through its ownership of all of the outstanding Class B shares of common stock. This equity stake gives Intel control of Mobileye stock with slightly more than 99 percent of the voting power.
Insiders, including the CEO, are in for up to $340 million – or about 43.7 percent – of the $779 million IPO. Here’s the breakdown of insider interest:
- Cornerstone investors Baillie Gifford and Norges Bank Investment Management have indicated an interest in buying an aggregate of up to $330 million of the Class A common stock in the IPO.
- In addition, co-founder and CEO Amnon Shashua has indicated an interest in buying up to $10 million of the Class A common stock in the IPO.
If insiders’ indications are fulfilled, that leaves 23 million shares available to the public through the IPO.
“Smart” Car Pioneer
Mobileye Global was founded in 1999. Based in Jerusalem, Mobileye has more than 20 years of experience in designing and fine-tuning its chips, software, hardware and technology that provide collision avoidance and other safety solutions considered standard in most of today’s “smart” cars. Mobileye says it is working with more than 50 Original Equipment Manufacturers (OEMs) worldwide on the implementation of its ADAS (Advanced Driver Assistance Systems) solutions.
As of July 2, 2022, Mobileye says that its ADAS solutions had been installed in about 800 vehicle models and its System-on-Chips (SoCs) had been deployed in over 117 million vehicles. By 2030, Mobileye estimates that its ADAS solutions will be deployed in more than another 266 million vehicles, according to the prospectus.
Mobileye sees self-driving cars as the future. But not everyone is on board with its vision.
“Self-driving cars? I just don’t see that any time soon,” a seasoned IPO trader says.
Some other deals, including a few IPOs that have been delayed recently, could slip onto the IPO Calendar this week.
Note: Never trade on proposed symbols. They have been known to change and you might buy something on the OTC Bulletin Board.
To see what time the NASDAQ IPOs are expected to trade, please log in to: NASDAQTrader.com then scroll down to IPO Message.
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