Intel (INTC) shares defied the chip and tech gloom in early Wednesday trading after the chipmaker said the listing of its self-driving division, Mobileye Global (MBLY) , generated better-than-expected investor interest and a higher end price.
Mobileye, which was purchased by Intel for around $15.3 billion in 2017, sold around 41 million of its class A shares at $21 each, topping the estimated IPO range of between $18 and $20 per share and valuing the Israel-based group at around $16.7 billion.
The sale only represents a 5% stake, however, and raises just over $860 million, thanks in part to weakness in the broader IPO market and the ongoing volatility in global stocks. The shares will trade on the Nasdaq Global Select Market starting Wednesday.
"A significant portion of the net proceeds from this offering will be used for repayment on a note owed to Mobileye’s parent company, Intel Corporation, and Mobileye intends to use the remaining net proceeds for working capital and general corporate purposes," Mobileye said.
Intel shares were marked 0.9% higher in early Wednesday trading to change hands at $27.69 per share.
Earlier this month, Bloomberg News reported that Intel preparing to cut thousands of jobs in the coming weeks amid the ongoing slump in demand for personal computers, with the layoffs detailed alongside the group's third quarter earnings on October 27.
Analysts expect Intel to post a bottom line of 32 cents per share on revenues of $15.25 billion, with both figures coming in at the lower-end of the company's revised summer guidance.
Intel slashed its full-year sales forecast on July 29 to between $65 billion and $68 billion, following weaker-than-expected second quarter earnings, as softening demand, supply chain disruption and run-away inflation continue to hammer PC demand.
Current quarter sales, Intel added, would likely range between $15 billion and $16 billion.
Intel is also facing pressure in its data center chip business, as well, with analysts at Wells Fargo cautioning that "increasing concern over year-on-year data center revenue declines in 2023 will persistently weigh on shares" as it cut their price target on the chipmaker by $13, to $32 a share, earlier this month.
The brokerage added that Intel could also see a writedown of its bloated inventory levels, which were pegged at $12.2 billion at the end of its second quarter, following similar markdowns at rivals Nvidia (NVDA) and Advanced Micro Devices (AMD).
