Wednesday saw the spin-off of Intel’s driver-assist subsidiary Mobileye. The initial public offering raised $861 million. Mobileye stock rose 34% Wednesday, compared to $21 per share at the initial public offering.
Intel purchased Mobileye for $15.3 billion in 2017. However, it announced Dec. 2021 that Mobileye would be spun off.
The stock of Intel has suffered in recent years due to its inability to compete in the semiconductor market. It needs to make substantial capital investments. Intel announced plans earlier this year to invest $20 billion in an Ohio chip factory and last year said it would spend $20 million on two new Arizona facilities. The stock of Intel is down 48%.
Mobileye was founded in Israel in 1999. It is an innovator in driver-assist technology. The technology can detect the road and adjust accordingly. Mobileye claims that the technology improves road safety and has installed it on approximately 800 vehicles. Mobileye has close to 3,100 employees, operates in eight countries, and counts Ford, BMW, and General Motors as its customers.
Mobileye is working to improve its technology to make it easier for drivers to see the road. Mobileye estimates that its potential market will grow to $16 billion by 2026, $40 billion in 2026, and $480 billion by 2030. It is working towards developing fully autonomous robotaxis. Mobileye posted 43% growth year-over-year in 2021 with revenue of almost $1.4 billion and an adjusted net income of $474 million.
Robotaxis are competitive. Large companies such as Alphabet’s Waymo or General Motors Cruise have spent billions and pushed back the deadlines for large-scale rollouts. Mobileye tested self-driving cars in New York City.
Mobileye is most well-known for squabbling with Tesla in 2016. This was after a fatal accident that drew national attention and prompted a federal investigation. Mobileye believed that Tesla had not safely integrated the technology into its driver-assist technology Autopilot. However, the companies had previously worked together.
Mobileye stated that “there is much at stake here, both to Mobileye’s reputation and industry at large.”
Mobileye believes that being a publicly traded company may again help it attract attention to its products.
Mobileye spokesperson Dan Galves stated Wednesday that “It is important for us to increase attention and a platform public company allows you to achieve that,” he said.
Intel said that it will still be the majority owner of Mobileye, and the companies will continue to work as strategic partners. Amnon Shashua, founder of Mobileye and CEO will continue to be with the company.
Shashua stated in a filing that “Mobileye’s goals — mine — are incomplete, but I am as committed to a safer tomorrow.”