Intel’s (INTC stock) initial public offering (IPO) of Mobileye Global is aiming for a valuation of almost $16 billion, far lower than anticipated.

A lackluster performance in the stock market has repercussions.

A valuation of $50 billion was once thought possible for the Jerusalem-based manufacturer of chips and software for driverless vehicles. This estimate was made earlier this year. In a document made on Tuesday, Mobileye revealed its intentions to raise as much as $820 million by selling 41 million Class A shares at a price projected to range between $18 and $20 per share.

In 2017, Intel paid around $15 billion to acquire Mobileye, a company located in Jerusalem. Intel had recently submitted paperwork for its first public offering. Because the chip manufacturer has been a shareholder in the firm for the previous five years, the value would result in a modest return for the chip maker.

INTC Stock Price

During premarket trading on Tuesday, shares of Intel were trading 1.2% higher at $26.74 per share.

According to the financial report for the June quarter that Intel released, Mobileye reported sales of $854 million for the first six months of 2022. According to the documentation for its first public offering (IPO), it had an operating loss of $36 million and a net loss of $67 million during the same period.

It shouldn’t come as much of a surprise that the reaction was lukewarm. Rising interest rates, which lower the present, discounted worth of future earnings, encourage investors to focus on short-term profitability, which has caused growth-oriented technology firms to fall out of favor. The Nasdaq CompositeCOMP +0.56% has lost roughly 32 percent this year, while shares of Intel have dropped by 49 percent.

The initial public offering (IPO) revenues from Mobileye being lower than anticipated would be the latest in a series of challenging occurrences for Intel. Its results for the second quarter, revealed in July, were a significant disappointment. According to a story published by Bloomberg earlier this month, the chip manufacturer may soon cut thousands of jobs. And now, many experts anticipate that the corporation will again let them down when it announces its figures for the third quarter on October 27.

 

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