(Bloomberg) — Intel Corp. is weighing options for its stake in Mobileye Global Inc., a struggling provider of automated driving systems, as part of a major strategic review, people with knowledge said.
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The chipmaker could sell part of its 88% stake in Mobileye on the open market or through a sale to a third party, the sources said, speaking on condition of anonymity because the information was private. Mobileye is scheduled to hold a board meeting in New York later this month to discuss Intel’s plans, one of the sources said.
Mobileye, founded in 1999, provides software and hardware for self-driving systems. The Jerusalem-based company went public in 2022 via a U.S. IPO. Intel sold part of its stake in Mobileye last year, raising about $1.5 billion.
If Intel continues to try to raise money using more of its Mobileye stake, it will do so at a difficult time. Mobileye shares have fallen about 71% this year, giving it a market value of about $10.2 billion, and the company is on track for a third straight annual loss.
Mobileye has been hurt as automakers have cut production amid a post-pandemic supply glut across the industry. Last month, the company slashed revenue forecasts and lowered its adjusted operating income guidance to well below what analysts were predicting.
The latest deliberations over Mobileye are part of broader discussions between Intel and its advisers about ways to improve performance and navigate the most difficult period in its 56-year history. Bloomberg News reported last month that the company was considering a range of strategic scenarios, including possible mergers and acquisitions.
Network Unit
Santa Clara, California-based Intel is separately exploring options for its enterprise networking division, the sources said. The business, called Network and Edge, which makes chips for use in computer and telecommunications networks, saw revenue fall by nearly a third last year to about $5.8 billion, according to results for the period.
Intel has not made any final decisions about its stake in Mobileye or its networking division, the sources said, declining to be named as confidential information is involved.
An Intel representative responded in an emailed statement: “We have an unwavering focus on creating shareholder value and are executing on the plan we shared last month to accelerate profitable growth and create a leaner, simpler and more agile Intel for the future.”
A Mobileye spokesperson declined to comment.
Intel CEO Pat Gelsinger has launched an ambitious plan to regain his company’s lead in the semiconductor industry by building new factories and rapidly improving manufacturing technology.
Intel posted a net loss of $1.61 billion in the most recent quarter and analysts are predicting more red numbers in the coming year, putting pressure on Gelsinger to engineer a turnaround. The company’s board of directors is expected to present several strategic options at a meeting later in September.
–With assistance from Dinesh Nair.
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