NEW YORK, Oct 26 — Mobileye Global Inc, the self-driving unit of chip maker Intel Corp, raised US$861 million (RM4 billion) in an initial public offering (IPO) yesterday, braving the trading volatility that has thwarted many stock market hopefuls, according to a person familiar with the matter.

Mobileye priced 41 million shares at US$21 per share, the source said, requesting anonymity ahead of an official announcement. The company had previously guided the IPO could be priced at between US$18 and US$20 per share.

The IPO values Mobileye at US$16.7 billion, a far cry from the US$50 billion valuation that Intel was initially hoping to achieve.

Mobileye is selling only a 5 per cent stake in itself, less than the typical 10 per cent to 20 per cent stake for most IPOs. This limits the financial hit it will take as a result of its lower valuation.

Mobileye did not immediately respond to a request for comment.

US IPOs are having one of their worst years on record, with traditional offerings on track to raise the least money in over two decades, according to Dealogic which tracks listing data going back to 1995. The Renaissance IPO index, which captures the largest and most liquid US IPOs, has slumped 51.4 per cent this year, compared with the S&P 500 index’s drop of 19.54 per cent.

The Cboe Volatility Index, Wall Street’s fear gauge, is hovering at about 29. VIX readings above 20 are generally associated with an elevated sense of investor anxiety about the near-term outlook for stocks.

Frozen markets

Hundreds of companies have postponed IPO plans this year due to volatility in capital markets. Earlier in October, grocery delivery startup Instacart scrapped its plans to go public this year.

Intel Chief Executive Officer Pat Gelsinger has defended Mobileye’s decision to push ahead with an IPO, saying the listing was a way to "move (Mobileye) into the market”.

Intel will retain a large stake, including all the Class B shares Mobileye plans to issue, according to a filing with the US Securities and Exchange Commission. Each Class B share will have voting rights equivalent to 10 Class A shares.

Mobileye reported US$854 million in revenue for the first six months of the fiscal year, up 21 per cent from same period last year. The company posted a net loss of US$67 million.

Mobileye first went public in 2014 at a roughly US$5 billion valuation, before Intel acquired it for US$15.3 billion in 2017.

Mobileye’s shares are scheduled to start trading today on the Nasdaq under the symbol "MBLY”.

Goldman Sachs Group Inc and Morgan Stanley are the lead underwriters for the offering. — Reuters