Mobileye Stock.- In a move to capitalize on the surging self-driving technology industry, chip maker Intel has decided to sell shares of Mobileye, its spun-off subsidiary. The sale, amounting to approximately $1.4 billion, comes as Mobileye’s market value continues to climb.
The subsidiary of Intel, listed as INTC (ticker: INTC), plans to sell 35 million Mobileye (MBLY) shares, with an additional option of 5.25 million shares for underwriters.
As a result of this announcement, Mobileye stock experienced a 5.8% decline to $39.90 during premarket trading on Tuesday. The market estimates the value of the shares being sold at just under $1.4 billion.
Intel initially listed Mobileye in October of the previous year at a valuation close to $16 billion, which was lower than anticipated. However, the market capitalization of Mobileye has since skyrocketed to around $35 billion, largely driven by the growing enthusiasm surrounding artificial intelligence-related stocks.
Given this surge, Intel has recognized an opportunity to realize gains on its investment in Mobileye, which it acquired for approximately $15 billion in 2017.
In contrast, Intel’s stock experienced a modest 0.3% increase during premarket trading on Tuesday. While Intel shares have risen by 13% this year, they still lag behind the 36% increase observed in the PHLX Semiconductor Index.
By strategically divesting its Mobileye shares, Intel aims to leverage the current market conditions and secure substantial returns. This move highlights Intel’s recognition of the potential for growth in the autonomous driving sector, as well as its commitment to optimizing its investment portfolio.
As the market eagerly awaits further developments in the self-driving technology space, investors will closely monitor the performance of Mobileye Stock. Investors will keenly observe how Intel’s decision to sell its shares impacts both companies and the broader landscape of artificial intelligence-driven innovations.