Mobileye IPO Warns of Potholes in Road to Autonomous Driving
The Mobileye IPO is shaping up to be one of the most important offerings in the U.S. in 2022, but its price may be stretched. The company faces a growing logjam of chip-related assets, as well as a proliferating number of rivals. Despite its inflated valuation, the IPO could be one of the biggest U.S. offerings in 2022.
Mobileye’s IPO price appears stretched
Intel CEO Pat Gelsinger has said the company is aiming for an IPO in order to “unlock value” for its shareholders. However, The Register reported earlier this year that the real reason may be to fund Intel’s revitalization plan. The IPO price was slated to be about $50 billion, or roughly one quarter of the value of Intel. However, the company postponed the IPO in July, citing concerns about high stock market volatility.
If Mobileye were to list on the New York Stock Exchange, it would be one of the biggest offerings of the decade. However, only two companies have raised $1 billion or more on the New York Stock Exchange since Jan. 1. The number of IPOs in the US has dropped to less than seven percent of the global total. The IPO price on Thursday was higher than the previously stated range of $21 to $23.
It could be one of the biggest U.S. offerings of 2022
The company did not specify the price of its shares in its SEC filing, but it did discuss its history and expected revenue growth. The company is projected to grow its revenue from $879 million in 2019 to $1.4 billion in 2021, a 43 percent year-over-year increase.
The IPO is one of the best ways for companies to get exposure to the wider market, and it is a great way for companies to fund their growth. The IPOs of companies like Mobileye could be one of the biggest in the US in 2022.
It faces a proliferating array of rivals
Mobileye, which was founded in 1999, is a computer vision technology company that supplies computer vision expertise to the auto industry. While the company has a long list of clients, it faces a growing number of competitors in the automated car expertise sector. These rivals include Tier 1 suppliers, robotaxi developers, and consumer AV providers.
One of the biggest hurdles on the road to autonomous driving is the lack of infrastructure. While the company has had first-mover advantage, the number of competitors in the space is growing rapidly. As such, there will be a lag time in implementing new infrastructure.
It could clear a growing logjam of chip-related assets
The Mobileye IPO could clear a choking logjam in the chip sector by clearing the way for an IPO by another chip maker. The chip maker is planning to sell its shares on the Nasdaq market under the symbol MBLY. The company is aiming for a $30 billion valuation. However, that valuation could be far too high for its current business.
The company has been pursuing a strategic repositioning in its chip business. Its CEO has laid out an ambitious spending plan for the company to revive its sales and market share. The chipmaker plans to regain its manufacturing prowess, enter new areas, and regain technological leadership. The IPO could also break the ice for a wide range of chip-related assets. Ampere Computing LLC is reportedly planning an IPO as well.
