Shares of Intel (NASDAQ:INTC) are trading higher this morning after it was announced that its subsidiary, Mobileye, is eyeing an initial public offering (IPO) in mid-2022. Mobileye is an autonomous driving company that Intel acquired for $15.3 billion in 2017. Intel stands to make a profit, as Mobileye is estimated to IPO at a $50 billion valuation.
This is great news for Intel, as the chipmaker has had a rough 2021, returning 9% year-to-date compared to the S&P 500’s return of 26% during the same period. On the other hand, Mobileye has “achieved record revenue year-over-year with 2021 gains expected to be more than 40 percent higher than 2020.”
After the IPO, Intel will remain the majority shareholder of Mobileye, and the two companies will continue to collaborate as strategic partners. Intel has stated that it has “no intention of spinning off or otherwise divesting its majority ownership interest.”
With that said, let’s jump into the details of the Mobileye IPO.
What to Know About the Upcoming Mobileye IPO
- Mobileye was founded in Jerusalem in 1999 and is one of the biggest tech success stories to come out of Israel.
- Additionally, the company is founder-led by CEO Amnon Shashua.
- This isn’t the first time Mobileye has made a public debut on the markets. The firm was previously listed on the New York Stock Exchange before being acquired by Intel in 2017.
- Mobileye develops self-driving cars and advanced driver-assistance systems (ADAS) for other automakers. Additionally, the company supplies technology such as cameras, software and computer chips. However, its core business focuses on providing camera-based systems to help with automatic braking and staying in lane.
- Earlier this year, the company tested self-driving car prototypes in major cities, including Paris, Detroit, Tokyo and Shanghai. The company has also secured several deals for its mobility-as-a-service (MaaS) programs that will start in 2023.
- In the past, the autonomous driving company has signed partnerships with automakers such as Tesla (NASDAQ:TSLA), General Motors (NYSE:GM) and BMW.
- Mobileye supplied camera systems to Tesla during 2015 for Autopilot, Tesla’s self-driving program. However, the two parties don’t work together anymore.
- Mobileye CEO Shashua sees synergy between Intel for the coming future: “Our alignment with Intel continues to provide Mobileye with valuable technical resources and support that has yielded strong revenue along with free cash flow that allows us to fund our AV development work from current revenue. Intel and Mobileye’s ongoing technology co-development will continue to deliver great platform solutions for our customers.”
- Looking ahead, Mobileye plans on expanding its business to the radar and light detection and ranging (LIDAR) industry.
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.