Mobileye Makes Solid Initial Public Offering, Raises $890M - Analyst Blog


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Recently, Israeli company MOBILEYE N.V. ( MBLY ) raised $890 million at $25 per share from an Initial Public Offering (IPO), higher than its expectations of $21 to $23. MOBILEYE's offering marks the largest IPO by an Israeli company in the U.S. equities market. Mobileye plans to utilize the proceeds to purchase inventory.

Out of the 35.6 million shares offered in the IPO, 8.33 million shares were sold by MOBILEYE and the remaining shares were sold by shareholders. This marked Israel's largest IPO in over a decade. Shares of MOBILEYE gained around 48% to close at $37 per share in Friday's trade on the New York Stock Exchange, substantially higher than its $25 sale price. Nonetheless, share price declined 0.9% on Monday as some of the investors took profit.

Mobileye provides essential components for the emerging advanced driver assistance systems (ADAS) market. Its EyeQ chip and software algorithms are used to take pictures of the route to be taken to determine lanes, vehicles, pedestrians, obstacles, traffic signals, congestion and other relevant information and thus assist the driver.

The company's technology is already used by some of the leading car manufacturers including BMW, General Motors Company ( GM ) and Tesla Motors, Inc. ( TSLA ). Management expects the technology to be used in 160 models from 18 car manufacturers this year, growing to 237 car models from 20 manufacturers by 2016. Mobileye has won 80% of the serial production deals it pursued for its ADAS solution. Higher safety standards across the world are expected to work in its favor. Its driverless car technology is currently in the works.

The company sells its products direct to OEMs and also in the after-market to fleet management, insurance and leasing companies. It sold over a million chips in the last two fiscal years.

It is worth noting that MOBILEYE's revenues surged to approximately $81.2 billion in 2013, helping the company report a profit of approximately $20 million in 2013 compared to a loss of $53 million in the year-ago period.

The remainder of 2014 will see a number of IPOs particularly in the technology sector that includes the likes of Box and Alibaba.

F5 Networks, Inc. ( FFIV ) is a technology stock with a Zacks Rank #1 (Strong Buy) and therefore worth considering.

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This article appears in: Investing , Business , Stocks
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