Mobileye shares rocket 50% on first day of trading

Here are 4 things to know about the developer of camera systems.

By MSN Money Partner Aug 1, 2014 1:58PM
Credit: © Richard Drew/AP

Caption; Opening bell ceremonies marking Mobileye’s IPO on the New York Stock Exchange, Friday, Aug. 1, 2014.By Angela Johnson, MarketWatch

Shares of Mobileye NV (MBLY) soared on their first day of trading Friday after the company priced its initial public offering above the top of its indicated price range.

The Israeli developer of camera systems that help cars detect other vehicles, pedestrians and roadway markings sold 35.6 million shares at $25 a share. Shares were offered in a range of $21 to $23. If the overallotment option of 5.3 million is exercised, the offering could raise $1.02 billion.

The strong demand for the offering comes despite the steepest one-day drop in the Nasdaq Composite Index ($COMPX) on Thursday since April 10.

Here are four things to know about the company:

Financials: The company has a long record of losing money. Revenue in 2013 doubled to $81.2 million, from $40.3 million. While Mobileye posted a $19.9 million profit for 2013, it posted a $19.6 million loss for the first quarter of 2014. In its prospectus, it noted there is no assurance that it will become and remain profitable.

Indeed, it forecasts a bottom line for the second quarter of between a loss of $0.1 million and a profit of $0.6 million, compared with a profit of $4.0 million for the quarter ended June 30, 2013.

In addition, it flagged a "material weakness in our internal control over financial reporting, which resulted in the restatement of our 2013 earnings per share."

Customers: General Motors (GM) is its biggest client, accounting for 29 percent of revenue from original equipment manufacturing. Honda accounts for 25 percent of OEM revenue, followed by BMW at 15 percent, it said. OEM revenue totaled $63.3 million in 2013, or 78 percent of total revenue.

Who cashed out through the IPO: Most of the shares sold came from existing investors. The biggest is a unit of Goldman Sachs (GS), which sold 4.4 million shares, reducing its stake to 12.3 percent from 14.9 percent. Other sellers included Amnon Shashua and Ziv Aviram, the company’s founders and senior executives. Shares trade on the New York Stock Exchange.

Political risk: Mobileye noted this in its prospectus:

"We could be harmed by any major hostilities involving Israel, the interruption or curtailment of trade between Israel and its trading partners or a significant downturn in the economic or financial condition of Israel.

"Some of our employees in Israel are obligated to perform annual reserve duty in the Israeli military and are subject to being called for additional active duty under emergency circumstances."

Read Mobileye’s full prospectus here.

More from MarketWatch

Aug 2, 2014 12:51PM
Another psychopath junk stock in the tech sector. We have no economy, so desperate deadbeats buy into these IPOs hoping to make big bail-money bucks. Nothing ever trickled down. Now that the crash is eminent, what will these deadbeats do? My guess-- make lemming jumps. 
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