Intel's self-driving subsidiary, Mobileye, is targeting an IPO that would value it at nearly $16 billion. Intel said in a filing Tuesday it expects the offering to be priced between $18 and $20 per share.
The valuation, which is lower than earlier reports, is the latest sign that the initial public offering market has significantly cooled as interest rates rise and investors prepare for a potential recession. Mobileye shares will be traded on the Nasdaq. The Nasdaq Composite is down more than 30% so far this year.
Intel aims to raise as much as $820 million which it will use for working capital and corporate purposes, it said in the filing.
Intel will retain control of Mobileye. It will hold over 750 million shares of Class B stock which has 10 times the voting power of Class A stock.
Class A stock is what investors will buy in the IPO. Intel expects there to be 46.26 million Class A shares outstanding, with the potential for more depending on if the underwriters decide to exercise their option to purchase additional shares.
In total, Intel expects there to be 796.26 million shares of Mobileye outstanding that, if priced at $20 at the high end of the range, would give the self-driving division a valuation up to $15.9 billion.
Intel bought Israel-based Mobileye for $15.3 billion in 2017. Mobileye, founded in 1999, builds chips, hardware and software for self-driving cars and advanced safety features like lane-keeping and driver assistance.
Intel is currently going through a transformation in its core business of making computer chips. It's building additional factories to become a manufacturer for other companies. But building and outfitting new fabs is capital intensive.
Mobileye has partnerships with automakers such as Audi, BMW and Volkswagen, and its technology is currently in 800 vehicle models, it said in the filing.
The filing shows strong revenue growth for Mobileye from $879 million in sales in 2019 to $1.39 billion last year.
Intel's stock was down nearly 2% in afternoon trading Tuesday.