Intel weighs selling part of Mobileye to raise much-needed capital
Intel weighs selling part of Mobileye to raise much-needed capital
Amid revenue declines and market pressures, Intel is considering selling part of its 88% stake in the Israeli automated driving systems provider.
Intel is considering selling part of its stake in Israeli automated driving systems provider Mobileye to offset its broader financial woes, according to Bloomberg.
Intel currently holds 88% of Mobileye and would sell part of its stake on the public market or via a deal with a third party. Mobileye has lost over 70% of its market cap since the start of the year, falling to a valuation of a little over $10 billion. This is lower than the $15 billion that Intel paid for it in 2017 before deciding to take it public again in 2022.
Mobileye, founded by Prof. Amnon Shashua and Ziv Aviram, is a pioneer in the field of autonomous vehicles. It sells systems that make driving almost autonomous, mainly to car manufacturers and suppliers of components for car manufacturers (Tier 1). Since the end of 2023, the company has been suffering from a significant decline in its business performance, which is unrelated to the war in Israel and is primarily due to the challenges in the Chinese market. Mobileye has already reduced its forecasts several times, and according to the latest projection provided about a month ago, it is expected to end 2024 with revenues of only about $1.6 billion—around $1 billion less than the original forecast of $2.6-2.9 billion. This represents a profound and unusual misstep for an established public company.
Mobileye is scheduled to hold a board meeting later this month in New York during which Intel’s plans are expected to be discussed.
A representative for Intel told Bloomberg: “We have an unwavering focus on shareholder value creation and are executing the plan we shared last month to accelerate profitable growth and create a leaner, simpler and more agile Intel for the future.”
A spokesperson for Mobileye declined to comment.
Intel, which has found itself in dire straits, is set to complete its planned layoffs by the end of October, according to a report from Reuters. The company, which announced a 15% staff reduction as part of a broader cost-cutting strategy, is expected to finalize these cuts before reporting its current quarter’s earnings. This move comes as the Santa Clara-based chipmaker grapples with financial challenges and a $7 billion loss in its foundry business, which is a key part of CEO Pat Gelsinger’s turnaround strategy.
