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Will Intel's Mobileye IPO drive further fab funding?

Finally 'unlocking value' for the 2017 $15b acquisition, just not via the imagined route

Intel has filed for an IPO for its Mobileye automotive biz following earlier delays, but it is not clear what value the chip giant expects to get from the flotation of the vehicle tech outfit it acquired in 2017.

The Israel-based startup submitted an updated filing with the US Securities and Exchange Commission at the end of last week for an IPO of shares of its Class A common stock. Mobileye specializes in hardware and software intended to drive autonomous vehicles. Intel bought the company for $15 billion, a move said at the time to be a third more than what the company was actually worth.

According to an Intel announcement today, investment banks Goldman Sachs Group and Morgan Stanley have been selected as lead underwriters for the public offering.

This move follows the submission of a private draft Form S-1 statement for an IPO with the SEC in March, and Intel’s disclosure in December of last year that it intended to take Mobileye public.

At acquisition time, Intel CEO Pat Gelsinger said the reason for the IPO was to "unlock the value of Mobileye for Intel shareholders." However, The Register suggested earlier this year the real reason could be to help fund Intel’s revitalization plan, as the original reports mentioned a valuation for Mobileye's IPO at upwards of $50 billion, or around a quarter of what Intel itself was worth at the time.

In July, it appeared that the IPO had been postponed, with Intel and Mobileye citing fears that a public listing at that moment in time would subject it to high volatility in the stock market, which might impact the company's valuation.

But last Month, Bloomberg reported that Intel had "scaled back expectations" for the IPO in the face of the slump in semiconductor stocks due to weakening market demand, itself caused by rising inflation and consumer spending being reduced due to the worsening economic outlook.

This was reflected in Intel's valuation of Mobileye being trimmed to about $30 billion, according to Bloomberg, citing sources that asked not be identified. However, this has yet to be confirmed, as Intel said the timing, number of shares to be offered and the price range for the proposed offering have yet to be determined. ®

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