Intel unit Mobileye spikes 28% on its first day of trading.
Mobileye Global Inc, the self-driving unit of chip maker Intel Corp(INTC.O), raised $861 million in an initial public offering (IPO), braving the trading volatility that has thwarted stock-market hopefuls, the company said on Tuesday.
Mobileye said in a press release it has priced 41 million shares at $21 per share. The company had previously guided the IPO could be priced at between $18 and $20 per share.
The IPO values Mobileye at $16.7 billion, a far cry from the $50 billion valuation that Intel was initially hoping to achieve.
Mobileye is selling only a 5% stake in itself, less than the typical 10% to 20% stake for most IPOs. This limits the financial hit it will take as a result of its lower valuation.
Intel Chief Executive Officer Pat Gelsinger has defended Mobileye's decision to push ahead with an IPO, saying the listing was a way to "move (Mobileye) into the market".
Intel will retain a large stake, including all the Class B shares Mobileye plans to issue, according to a filing with the U.S. Securities and Exchange Commission. Each Class B share will have voting rights equivalent to 10 Class A shares.
Mobileye reported $854 million in revenue for the first six months of the fiscal year, up 21% from same period last year. The company posted a net loss of $67 million.
Mobileye first went public in 2014 at a roughly $5 billion valuation, before Intel acquired it for $15.3 billion in 2017.
Mobileye's shares are scheduled to start trading on Wednesday on the Nasdaq under the symbol "MBLY".
Goldman Sachs Group Inc and Morgan Stanley are the lead underwriters for the offering.
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