Intel weighs selling part of Mobileye stake, report says

Intel is considering options for its stake in its struggling automated driving systems provider, Mobileye, as part of a major strategy overhaul, people with knowledge of the matter said. Shares of Mobileye fell to a record low.

The chipmaker could offload some of its 88 percent holding in Mobileye on the public market or via a sale to a third party, according to the people, who asked not to be identified because the information was private. Mobileye has a board meeting later this month in New York, where Intel’s plans will be considered, one of the people said.

Mobileye shares fell as much as 9.3 percent to $11.45 after trading opened on Friday, reaching their lowest level since the Jerusalem-based company went public via a U.S. initial public offering in 2022. 

Founded in 1999, Mobileye provides software and hardware for self-driving systems. Intel already sold part of its stake in Mobileye last year, raising about $1.5 billion from the deal. 

If Intel pushes ahead with trying to raise money using more of its holding in Mobileye, it will be doing it at a difficult time. Mobileye’s stock was down about 71 percent this year through Sept. 5, leaving it with a market value of roughly $10.2 billion. 

Mobileye has suffered as automakers have reduced production amid a post-pandemic supply glut across the industry. Last month, the company slashed revenue forecasts and lowered its projection for adjusted operating income to well below what analysts were projecting. The company is on course for a third-straight annual loss. 

Intel faces own difficulties

The latest deliberations over Mobileye are part of broader discussions between Intel and its advisers on ways to improve performance and navigate the most difficult period in its 56-year history. Bloomberg News reported last month that the company is studying a range of strategic scenarios, including potential M&A. 

Intel has made no final decisions on its stake in Mobileye, or the networking business, the people said, asking not to be identified discussing confidential information.

A representative for Intel provided this response in an emailed statement: “We have an unwavering focus on shareholder value creation and are executing the plan we shared last month to accelerate profitable growth and create a leaner, simpler and more agile Intel for the future.”

A spokesperson for Mobileye declined to comment.

Shares in Intel are down more than 60 percent this year. CEO Pat Gelsinger has launched an ambitious plan to regain his company’s lead in the semiconductor industry by building new plants and rapidly improving its manufacturing technology.

Intel had a net loss of $1.61 billion last quarter, and analysts are predicting more red ink for the year ahead, putting pressure on Gelsinger to turn around the company. Intel is discussing various scenarios, including a split of its product-design and manufacturing businesses. Intel’s board is expected to be presented with various strategic options during a meeting later this month.