Intel plans separate listing for Mobileye autonomous driving unit

Intel has announced plans to apply for a separate stock exchange listing for Mobileye, its driver assistance and autonomous vehicle unit, as it seeks to consolidate its stock price under the leadership of its chief executive Pat Gelsinger.

The US chipmaker said listing would “unlock value” for its shareholders, but retain majority control of the division, which has been a small but rapidly growing part of its growing line of business. chips in recent years.

The move follows a steady decline in Intel shares in recent months, thwarting a strong recovery among rivals, as Wall Street has lost confidence in Gelsinger’s ability to make a turnaround for its core PC and server chips business. .

Intel shares jumped 8% on Mobileye news in aftermarket trading on Monday. They ended formal trading earlier in the day about 25% below the high point they reached shortly after Gelsinger took the lead this year.

Intel paid $ 15 billion for Mobileye in 2017 as part of a race to diversify into new markets for chips. The acquisition was viewed at the time as costly for a group with less than $ 400 million in revenue in its most recent fiscal year at the time.

However, soaring valuations of fast-growing tech companies has since overshadowed that deal. Self-driving car companies Waymo and Cruise have each been valued at over $ 30 billion despite the lack of significant revenue.

Mobileye, one of Israel’s greatest technological successes, has been recognized as one of the early leaders in the development of sophisticated collision avoidance systems used by a host of leading automakers.

He was instrumental in helping Tesla establish Autopilot, but ended the relationship in 2016, as Tesla began to push the boundaries of safety and market the product as a driverless solution than Mobileye believed. .

Industry sources said that Mobileye’s core technology does not have a clear lead over rivals, but is adept at building relationships with major automakers.

One of Mobileye’s strengths is its two-pronged approach to developing autonomous driving. It has long been a leading provider of large-scale driver assistance systems, generating revenue and industrial influence through the shipping of automotive grade products.

But at the same time, Mobileye has also taken a “moonshot” approach by developing fully autonomous axis robots to compete with Waymo and Cruise.

On Monday, Intel announced that Mobileye’s revenue will increase by more than 40% for all of 2021. The company generated $ 1 billion in revenue in the first nine months of the year and operating profit of $ 361 million.

Intel said it plans to make a first public offering of Mobileye shares in mid-2022, although a final decision has not been made and will depend in part on market conditions. He added that he had “no intention of separating or divesting his majority stake”.

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