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Intel's Mobileye Reportedly Mulling Substantially Lower IPO Value

The chip giant's self-driving car unit is now eyeing a valuation of less than $20 billion, down from its original $50 billion target, the Wall Street Journal reports.

Mobileye autonomous driving test vehicles
Intel subsidiary Mobileye has a fleet of test cars to develop autonomous vehicles.
Intel Mobileye

Intel is considering a significantly lower valuation than previously expected for the initial public offering of its self-driving car unit Mobileye, The Wall Street Journal reported on Monday, citing people familiar with the matter.

Mobileye's IPO was originally expected to be worth $50 billion but is now expected to come in at less than $20 billion, with fewer shares being offered than originally planned, sources told the Journal. Mobileye also plans to kick off its roadshow for prospective investors on Tuesday, a day later than anticipated, the Journal reported.

The pullback in the IPO's valuation would appear to reflect the turmoil the IPO market has experienced this year. Rising inflation and interest rates, combined with recession fears, have pushed investors to safer alternatives.

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.

Intel still plans for shares of Mobileye to being trading on the Nasdaq Stock Exchange on Oct. 26, the sources said. 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.

Intel declined to comment on the report, citing US Securities and Exchange Commission regulations that prohibit it from discussing such matters.