Intel to sell $1.5B stake in Mobileye
Intel Corp. plans to wring around $1.5 billion out of Mobileye Global Inc., selling 35 million shares of the self-driving technology company, according to a securities filing.
The chip giant, which is one of the Valley’s largest employers, is taking advantage of a doubling of Mobileye’s value since it took the company public last October.
Mobileye (Nasdaq: MBLY) was down about 1.3% at $41.83 in midday trading on Tuesday, a day after it filed a prospectus for the offering. Intel (Nasdaq: INTC) was up 4% at $31.05.
The move comes as Intel continues to pursue an expensive revitalization plan even as it navigates a chip downturn and competitive pressure that has resulted in two consecutive losing quarters, including a record $2.8 billion loss in the first quarter this year.
The company is spending billions on new fabs and other facilities, including a $20 billion expansion at its Ocotillo Campus in Chandler, but it is also slashing spending through layoffs and other measures. It’s aiming for $3 billion in cuts this year and an annualized reduction of $10 billion by 2025.
Intel owned 93.1% of outstanding Mobileye stock and held 99.3% of voting power in the company as of May 15. When the offering goes through those stakes will fall to 88.7% of outstanding stock and 98.7% of voting power, according to the Mobileye filing.
Intel paid $15.3 billion for Israeli company in 2017. It took Mobileye public in on Oct. 26, selling 41 million shares at $21. That gave Mobileye an initial market capitalization of $16.7 billion. Its market cap midday Tuesday was $33.5 billion.
Intel is based in Santa Clara, California, and the chip giant employs more than 12,000 people in Arizona. The company did not immediately respond to a request for comment.