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Mobileye Forecasts Sharp Decline in Orders, Stock Tumbles Following Inventory Surplus Announcement

Mobileye, a self-driving tech firm under Intel's majority ownership, issued a cautionary statement on Thursday, anticipating a significant reduction in customer orders for the first quarter of 2024. This announcement led to a sharp 25% decline in their stock value during Thursday morning's trading session.


The company disclosed in its preliminary annual report that its clients currently hold excessive inventories. Post global supply chain disruptions, these automakers had procured large quantities of Mobileye's chips to mitigate any future scarcity of parts.


With supply chain issues now stabilizing, Mobileye foresees its clients utilizing this surplus inventory in the first quarter, leading to a decrease in new chip orders compared to the same period last year.


Intel's acquisition of Mobileye was first declared in 2017 for over $15 billion, and after going private, Mobileye re-entered the public market in October 2022. Last year, Intel divested $1.5 billion of its Mobileye shares but still owns an 88% stake.


Until this recent development, Mobileye's shares were performing robustly, trading well above their initial public offering (IPO) price. Despite Thursday's setback, investors from the IPO are still seeing an approximate 12% gain.


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