Is the Mobileye Upgrade and Secondary Offering a Goldman Sachs Hatchet Job?

By Chris Lange Published Mar 16, 10:05AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Mobileye N.V. (NYSE: MBLY) has filed a Form F-1 with the U.S. Securities and Exchange Commission (SEC) for a secondary offering. The offering will consist of 14.5 million shares from selling shareholders, and Mobileye will not receive any proceeds from the offering. No pricing information has been released, but the most recent closing price $41.63 would value the offering at an estimated $603.64 million.

The lead book-running managers for the offering are Goldman Sachs and Morgan Stanley. Other underwriters for the offering are Deutsche Bank, Barclays, Citigroup, Raymond James, William Blair and Wells Fargo. There is an overallotment option for an additional 2.175 million shares.

It is worth noting that Goldman Sachs upgraded Mobileye last week to a Buy rating from Neutral, and then it raised its price target to $50.00 from $40.40. The price target implies an upside of roughly 24% from current prices.

There is supposed to be a Chinese wall between research and underwriting, but we will let you decide how high that wall is. There was a big upgrade Thursday, then a big secondary announced Monday. Seemingly this punished whoever bought into Mobileye based on the upgrade at that time.

Also listed under selling shareholders in the filing is Goldman Sachs Group Inc. (NYSE: GS), which is offering a total of 4.63 million shares.

Mobileye designs and develops software and related technologies for camera-based advanced driver assistance systems, primarily in Israel.

Shares of Mobileye closed up about 3% at $41.63 on Friday. However, shares were down just the same 3% to $40.44 just after the opening bell in Monday’s trading session. The stock has a consensus analyst price target of $55.22 and a 52-week trading range of $31.11 to $60.28.

ALSO READ: The 10 Most Frequently Asked Questions by Investors Now

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.