Intel Reduces the Value of Mobileye to $30 Billion in the Wake of Its IPO

Intel Corporation NASDAQ:INTC

Intel Corporation (NASDAQ:INTC)

Bloomberg reports that Intel Corporation (NASDAQ:INTC) has substantially lowered its previously anticipated $50 billion valuation for Mobileye’s planned initial public offering to $30 billion. 

The news source also mentioned that the share sale might be postponed, citing insiders with knowledge of the procedure, and pointed out that both the valuation decrease and likely postponement are caused by the general stock market downturn.

If semiconductor stocks recover, the IPO may still take place, but if they remain underperforming, it will be delayed, according to Bloomberg. Following the announcement, shares of Intel (NASDAQ:INTC) gave up earlier gains and traded unchanged at midday.

A request for comment from Seeking Alpha was not immediately answered by Pat Gelsinger-led Intel (INTC). Intel (NASDAQ:INTC) announced in March that it had filed its draft registration statement for the IPO to the Securities and Exchange Commission in confidence. A month later, it was said that Intel (NASDAQ:INTC) had hired Goldman Sachs and Morgan Stanley to assist with the IPO procedure.

In 2017, INTC paid $15.3 billion for the Israeli tech firm in what was the largest high-tech acquisition in the country.  Following the IPO, Santa Clara, California-based INTC is anticipated to maintain a majority stake in Mobileye. The semiconductor giant is selling Mobileye in part to help turn things around as it competes with Advanced Micro Devices (NASDAQ:AMD), Nvidia (NASDAQ:NVDA), and other companies.

Under Pat Gelsinger’s leadership, INTC is making efforts to both expand into the foundry industry and turn around its main business. President Biden was present when Intel (INTC) broke ground on its Ohio facility last week.

Intel stock Performance 

In the past year, the share price of Intel Corporation (NASDAQ:INTC) has decreased by 42%. That is notably below the roughly 14% market decrease. The results remain depressing even if you project out three years, as the share price fell 40% over that time. Due to the share price falling 17% over the previous 90 days, investors have recently had an even worse time.

It’s important to examine if the company’s economics have been evolving in lockstep with these meager shareholder returns, or whether there has been some divergence between the two.

Featured Image-  Megapixl @Sedovukr

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