Mobileye Hits Record Low On Report Intel May Offload Partial Stake In Public Market 

Shares of Israeli autonomous driving company Mobileye Global plunged to a record low on Friday in New York after a Bloomberg report, citing sources, indicated Intel could be preparing to dump some of its stake in the software company on the public market or through a sale to a third party. This comes as the dumpster fire at Intel rages on as Intel CEO Pat Gelsinger prepares to pitch the chipmaker's board of directors on a turnaround plan.

The chipmaker could offload some of its 88% 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. -BBG

Mobileye provides software and hardware for self-driving systems. Intel already dumped a $1.5 billion stake in Mobileye last year.

Shares of Mobileye are down nearly 73% on the year. Any selling by Intel in the public markets could crush shares even lower. As of Friday morning, Mobileye has a market cap of around $9.56 billion. About 14.5%, or approximately 13.4 million shares of the company's float is short. 

In August, Mobileye slashed its annual revenue and profit forecasts due to dwindling demand for its driver-assistance chips in China. A slowdown in the global automotive market, including EVs, has translated into fewer orders for Mobileye's chips. Also, a dismal economic recovery in China and weakening growth in the US have weighed on Mobileye. 

Last month, RBC Capital Markets analyst Tom noted, "The narrative on Mobileye is more tied to SuperVision than macro. Winning SuperVision is a huge aspect and that's what the stock is trading on... More contracts were supposed to come in H2 and we're already in August, so some investors might be getting a little impatient." 

Also last month, Bloomberg reported Morgan Stanley and Goldman Sachs bankers were working with Intel to advise on several scenarios that could stop the market cap hemorrhaging, including a split of the chipmaker's product design and manufacturing businesses.

A separate report from Reuters this week said Intel's plan includes cost-cutting measures like selling businesses, such as the programmable chip unit Altera, which Intel can no longer support from its sliding profits. 

Gelsinger and senior executives are set to present a turnaround plan to the board of directors in mid-September. We expect more details to emerge around that time.