Intel "at this stage" is not considering selling the majority of its stake in Mobileye, with Mobileye's stock price surging nearly 19% at one point
Intel holds 88% of Mobileye's shares. Intel clarified on Thursday that it currently has no plans to sell the majority of its subsidiary Mobileye's shares, which relieved investors. As a result, Mobileye's stock price rose nearly 19% at one point. Previously, there were rumors in the market that Intel might reduce its stake in Mobileye to "rescue itself"
On Thursday night, the stock price of Mobileye Global rose nearly 19% to $13.79 at one point during the trading session, marking the largest single-day increase in nearly two years, before ultimately closing with a modest gain of 14.99%.
The reason for the sharp increase in stock price is that on Thursday, September 19th, Intel announced that it is currently not considering reducing its stake in its subsidiary Mobileye Global. This clarification statement eased investors' concerns as Intel holds 88% of Mobileye's shares.
Earlier on Thursday, September 5th, Bloomberg reported, citing sources, that Intel is considering new measures for "self-rescue" by contemplating selling part of its stake in Mobileye, either in the public market or to a third party.
Intel stated in its announcement that they are confident in the future of autonomous driving technology and believe that Mobileye holds a unique leadership position in developing and deploying advanced driver assistance systems.
Mobileye is a company that provides software and hardware for autonomous driving systems. It was acquired by Intel in 2017 for approximately $15 billion, becoming a subsidiary of Intel. Despite conducting an IPO in 2022, Intel still retains a majority of the shares. Last year, Intel sold some shares, raising approximately $1.5 billion. Currently, Mobileye has a market value of around $11 billion, which means that if Intel were to sell shares now, it would incur a loss.
Bloomberg analyst Jake Silverman pointed out that Intel's decision to maintain control of Mobileye helps alleviate Intel's current financial pressure, as selling Mobileye now would result in greater losses, affecting long-term financial health. However, Intel's statement still leaves open the possibility of selling these shares in the future.
Intel CEO Pat Gelsinger has been aggressively reforming the company in an attempt to self-rescue, focusing on core businesses to save cash flow. Intel's latest measures include suspending projects at factories in Poland and Germany for about two years, with plans to lay off 15,000 workers already half-executed, and spinning off its Intel Foundry Services (IFS) division as a wholly-owned subsidiary.
Like Intel, Mobileye's performance this year has been less than ideal. Due to a slowdown in automotive industry sales and car manufacturers lowering production targets, the company revised its performance forecast last month, dragging the stock price to a new low. Prior to the stock price rebound on Thursday, Mobileye had already fallen by 73% year-to-date