Intel's unit for self-driving cars, called Mobileye, priced its IPO at $21 a share, a dollar above its target range, the company said in a press release Tuesday. It then opened at $26.71 on Wednesday, before surging to a high of $29.86 during the day and closing at $28.97.
Wednesday on the Nasdaq stock exchange under the symbol MBLY.
Mobileye raised $861 million on the sale of 41 million shares. The company had previouslythat the initial public offering could be priced at between $18 and $20 per share.
Mobileye has been testing its autonomous vehicles in cities around the world to hone their ability to handle a variety of factors, such as weather conditions, urban layout, traffic signals and driving styles. Its existing advanced driver-assistance system cameras are built into models from Volkswagen, BMW, Toyota and others.
The stock offering valued Mobileye at about $17 billion, far below the $50 billion valuation that Intel initially expected. The lower valuation reflects the turmoil the IPO market has experienced this year, creating what's considered the worst IPO drought in 20 years.
Rising inflation and interest rates, combined with recession fears, have pushed investors to safer alternatives. IPOs in the US have raised a little over $7 billion so far this year, according to data from Dealogic.
Intel, which acquired Mobileye in 2017 for $15.3 billion, announced its plans to take the subsidiary public in September but reportedly plans to keep a majority stake in the company after the IPO. Mobileye sold only 5% to 6% of shares that will ultimately be outstanding, The Wall Street Journal reported, far less than the typical 10% to 20% for most IPOs.
Mobileye representatives didn't respond to a request for comment.