logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

Why Intel is unloading Mobileye

With big capital commitments for new foundries coming down the pike, Intel (INTC) is likely looking to free up resources by spinning off Mobileye.

The chip giant said Tuesday it would float Mobileye onto public markets. Industry experts peg the valuation on Mobileye north of $50 billion given its lead in autonomous driving technology and key deals inked with the likes of Ford and Geely. Mobileye also has attractive financials (the company has hauled in north of $442 million in operating income over the trailing-12 months, Wells Fargo notes) that support a high valuation, pros say.

“Intel’s acquisition of Mobileye has been a great success. Mobileye has achieved record revenue year-over-year with 2021 gains expected to be more than 40% higher than 2020, highlighting the powerful benefits to both companies of our ongoing partnership,” said Intel CEO Pat Gelsinger in a statement.

For the turnaround-focused Gelsinger, the spinoff makes sense for a few reasons.

First, Gelsinger moved quickly upon his return to Intel this year to commit the company to making chips for other entities. As part of that ambition, Intel is investing $20 billion to build new factories in Arizona.

The cash from Mobileye would be helpful in seeing those projects through, and others Gelsinger is eyeing on the foundry front.

Moreover, it would be a nice cash infusion should Gelsinger opt to acquire capacity instead of going full bore with internal build-outs.

The WSJ reported several months back that Intel was considering a purchase of chipmaker GlobalFoundries for $30 billion. GlobalFoundries is among the biggest specialist players in the chip industry. The company was spun out of Advanced Micro Devices in 2008. It still counts AMD as a key customer, making any potential purchase by Intel (a rival to AMD) tricky.

Gelsinger declined to comment on the speculation around GlobalFoundries in an interview earlier this year. But, he acknowledged at the time one can’t be a “little player” in the foundry business.

One way to not be little is to use money from the Mobileye spinoff and bulk up.

Meantime, the fact is Mobileye and autonomous cars isn’t a strategy Gelsinger signed off on. Mobileye was purchased by former Intel CEO Brian Krzanich in 2017 for $15.3 billion. Kraznich’s predecessor Bob Swan bought mapping technology outfit Moovit in 2017 for $900 million, which was folded into Mobileye.

Gelsinger’s playbook — gleaned from numerous chats with him throughout the year — is hyperfocus and is on restoring the history of Intel, which is making semiconductors.

And Wall Street appears to be on board with Intel saying goodbye to an operations role in Mobileye.

“We continue to believe that Mobileye is one of the more dynamic pieces of Intel’s portfolio and would highlight that the company is set for the deployment of fully driverless delivery starting in 2023 in a partnership with Udelv. In addition to unlocking Intel shareholder value, we believe IPO proceeds can assist with what looks likely to be a capital intensive 2023 rollout,” said Wells Fargo analyst Aaron Rakers in a research note to clients.

Related posts

February 3, 2023

Where Will AMD Stock Be In 1 Year?


Read more

Categories

  • Business
  • Content
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Where Will AMD Stock Be In 1 Year?
  • Here’s how — and where — Netflix has started cracking down on password sharing
  • 2 reasons Meta stock is exploding 20% after a whopper earnings miss
  • Apple earnings: What to expect from the iPhone maker
  • Bitcoin closes out best January since 2013

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company