Mobileye Global, Intel’s self-driving vehicle technology business shares debuted on the Nasdaq Wednesday and opened trading at $26.71, closing up 38 percent to $28.97, giving the company a market value of about $23 billion. MBLY raised $861 million by offering 41 million shares at $21, above the range of $18 to $20. INTC only floating 5% of its basic shares outstanding, well below the typical 15%, in light of current market conditions and market reaction. It listed on the Nasdaq under the symbol MBLY.
Mobileye is the fourth-largest in the US. Instacart Inc., another highly anticipated listing, decided against an IPO this year after cutting its valuation for the third time, to $13 billion. Only two 2022 listings on US exchanges have topped $1 billion. Corebridge Financial Inc. raised $1.68 billion in September and private equity firm TPG Inc.’s January listing brought in $1.1 billion. Last year, 45 companies raised $1 billion or more in IPOs on the New York Stock Exchange and Nasdaq, the data show.
Mobileye priced US IPO above the range at $21
Mobileye Global raised $861 million by offering 41 million shares at $21, above the range of $18 to $20. Cornerstone investors had indicated on $340 million of the offering (39% of the deal). General Atlantic agreed to buy an additional $100 million worth of shares in a concurrent private placement.
Mobileye is the year’s only $25+ million IPO to price above the range. While it is the year’s largest IPO by market cap at listing, Mobileye is only the year’s third-largest IPO by deal size, due to its relatively small float of about 5% of shares outstanding.
“Mobileye’s initial IPO pop validates investors’ interest in Mobileye’s growth prospects in the advanced driver-assistance systems (ADAS) market,” said Mandeep Singh, a senior analyst for Bloomberg Intelligence. “We believe similar to the growth of chips in smartphones, increasing demand for computer vision and ADAS systems in automobiles could be a multiyear expansion opportunity in semiconductors.”
The success of Mobileye’s listing springs from its proven business model and steady growth expectations, Singh said. “Still, it will be hard for companies without profitability to go public in this market,” he said.
An amount of 44% of the deal is already earmarked to be taken up. Baillie Gifford and Norges Bank Investment Management, as cornerstone investors, have indicated interest in purchasing up to an aggregate of $330 million shares. CEO Amnon Shashua intended to purchase an aggregate $340 million worth of shares in the offering (44% of the deal). Mobileye also plans to raise $100 million in a concurrent private placement to General Atlantic.
Intel said in its filings that it will continue to hold all of Mobileye’s Class B shares, which will allow it to control the company with 99.4 percent of the voting power.
The Mobileye is around the same valuation that Intel paid when it bought the company in March 2017. The IPO market has been in rude health this year, the projection for MBLY’s valuation was at about $50 billion in late 2021. This downward spiral for MBLY has created yet another millstone for Intel’s stock, already crushed by the severe deterioration in the PC/laptop market and the associated plunge in demand for chips.
Bookrunners
Goldman Sachs, Morgan Stanley, Evercore ISI, Barclays, Citi, BofA Securities, RBC Capital Markets, Mizuho Securities, WR Securities, Nomura Securities, and BNP Paribas are the joint bookrunners on the deal.
Profitability
MBLY’s business is already profitable on an adjusted basis. In the IPO prospectus, MBLY provided preliminary Q3 results, estimating revenue of $450 mln (+38%), adjusted gross margin of 73-74%, and adjusted operating income of $139-$143 mln (+11% at midpoint).
MBLY booked $1.5 billion in revenue for the 12 months ended July 2, 2022. For the six months ended July 2, 2022, MBLY’s revenue increased by 21% to $854 mln as its ADAS platform gains traction with an increasing number of auto manufacturers. Based on MBLY’s annualized revenue of roughly $1.75 bln for FY22, and its projected $16 bln valuation, the P/S is around 9.1x. Assuming revenue growth of 20% for FY23, MBLY’s forward P/S drops to about 7.6x.
As of October 1, 2022, MBLY’s products had been installed in about 800 vehicle models while its System-on-Chips had been deployed in over 125 mln vehicles.
About Mobileye
Mobileye Global is a Jerusalem, Israel-based company and was founded in 1999. Mobileye believes that it has pioneered advanced driver assistance systems (ADAS) technology, continuously expanding the scope of its ADAS offerings while leading the evolution to autonomous driving solutions.
The company’s portfolio of solutions is built upon a comprehensive suite of purpose-built software and hardware technologies and include its family of EyeQ System-on-Chips (SoCs), which were first launched in 2007. In the 9mo22, Mobileye shipped approximately 24.0 million of its SoCs (+13% y/y).
It currently ships a variety of ADAS solutions to 13 of the 15 largest automakers in the world, as well as many smaller OEMs. As of October 1, 2022, the company’s solutions had been installed in approximately 800 vehicle models, and its SoCs had been deployed in over 125 million vehicles.
Last year, MBLY announced over 40 design wins with major auto OEMs. That design win momentum has continued throughout 2022, leading MBLY to believe that its solutions will be embedded into more than an additional 270 mln vehicles by 2030.
From the TradersCommunity Research Desk