Intel Mobileye’s standalone IPO price exceeds target range

Intel Mobileye on Tuesday priced its initial public offering above its target range, valuing the autonomous driving company at nearly $17 billion, a rare positive development for the U.S. listing market.

The company sold 41 million shares at $21 a share, a person familiar with the situation said previously outlined price target of $18 to $20. It was the first major listing to price above its target range since December, according to Dealogic.

Intel is said to have been eyeing a $50 billion valuation when it first planned to take the business public last year. Even at the lower price, Mobileye is the most valuable company to go public in the US this year, and the first major tech listing since January.

However, few investors expect the deal to herald a quick recovery in the IPO a market that is on track for its worst year in decades due to a combination of volatile markets and a worsening economic outlook.

“For [IPO] for the market to come back with any strength, uncertainty must decrease, whether that means lower inflation, a halt to rate hikes, or at least [investors] it’s better to understand where we are at,” said Kyle Stanford, a PitchBook venture capital analyst. “I think there are still a lot of chips left in this downturn, so it could take some time.”

Excluding the upcoming Mobileye deal, traditional U.S. IPOs raised just $7.4 billion this year, down 94 percent from 2021, according to Dealogic data. Last week, it was reported that grocery delivery company Instacart became the latest company to postpone its plans to go public this year.

Recently listed companies were particularly hard hit by the broader market sell-off. Still, Mobileye has higher revenues and lower losses than some of its competitors, which peaked at IPOs before their products were ready for mass production.

Although Mobileye described its ultimate goal of fully autonomous driving as “nascent,” its better-known “driver assistance” technologies brought in $1.4 billion in revenue last year. Net losses decreased from $196 million to $75 million.

Intel and its bankers also took a cautious approach to the stock sale, selling just 5 percent of the company’s shares in an initial public offering and allocating a significant portion to two corner investors before the deal’s roadshow began last week.

Mobileye raised $861 million through an IPO, with another $100 million from investment firm General Atlantic through a private placement.