(Bloomberg) -- Mobileye Global Inc. shares surged the most in nearly two years after Intel Corp. said it isn’t “currently” preparing to unload its majority stake in the maker of autonomous driving technology, easing investors’ fears.
Intel, which holds 88% of Mobileye, said in a statement Thursday that it doesn’t have “any plans to divest a majority interest in the company.” The remarks sent the shares up as much as 19% to $13.79 in New York trading, marking the biggest intraday gain since Oct. 26, 2022.
“We believe in the future of autonomous driving technology and in Mobileye’s unique role as a leader in the development and deployment of advanced driver assistance systems,” the chipmaker said.
Intel Chief Executive Officer Pat Gelsinger has been shaking up his company’s operations and revealed more of his plans earlier this week, aiming to get the beleaguered chipmaker back on track. The latest initiatives include a pause in factory construction in Germany and Poland, as well as a move to turn its manufacturing division into a wholly owned subsidiary.
Intel also has explored options for its Mobileye stake, Bloomberg reported earlier this month. The discussions included the possibility of offloading a portion of the holdings, either on the public market or via a sale to a third party.
Mobileye, which provides both software and hardware for self-driving systems, was acquired by Intel in 2017 for about $15 billion. The business had an initial public offering in 2022, but its parent held on to most of the stake. Intel did sell some of its holdings last year, though, raising about $1.5 billion from the deal.
Mobileye’s market value is now about $11 billion, meaning that Intel would take a loss if it sold at the current level.
Like Intel, Mobileye has had a rocky year. The company slashed its forecasts last month, sending the stock to new lows. It cited lower production ambitions of its automaker customers, especially in China. Mobileye had lost 73% of its value this year before Thursday’s rally.
“Intel’s decision to maintain majority ownership of Mobileye removes a near-term overhang that may have lingered given Intel’s difficult financial position,” Bloomberg Intelligence analyst Jake Silverman said in a note.
Still, the wording of Intel’s statement leaves open the possibility of selling the stake in the future.
--With assistance from Lara Sanli, Subrat Patnaik, Ian King and Ryan Gould.
(Updates with more on Intel’s deliberations in fifth paragraph.)
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