Intel plans to lower the valuation of Mobileye ahead of the self-driving car firm’s IPO, according to a Wall Street Journal report based on anonymous sources.
According to WSJ, the chip maker plans to lower the valuation of its subsidiary to prepare for an IPO. In addition to a lower share price, Intel plans to make fewer shares available. Intel initially valued Mobileye at €51 billion ($50 billion), but now wants to reduce the valuation to less than €20 billion. The IPO should take place soon.
Valuation should fuel interest
Intel believes that the combination of a lower price and fewer shares should spark investor interest, anonymous sources told WSJ. It is hoped that the interest ends up highering the shares’ value after the IPO.
According to WSJ, Intel’s move is another indication of the pressure that the tech market is currently under. High inflation, increasing interest rates, fears of recession and falling stock prices spell trouble marketwide.
The result of Intel’s move should indicate whether the IPO market will continue to follow the trend. 2022 was a dark year for IPOs in the United States. Offerings produced some of the most disappointing results of our time. Many companies that had planned an IPO are postponing to 2023.