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Tag: Specialized Consumer Services

  • Alcoa’s stock rocked after unexpected CEO transition

    Alcoa’s stock rocked after unexpected CEO transition

    Shares of Alcoa Corp. slumped to a multiyear low Monday as the aluminum company said that Roy Harvey had been replaced as chief executive officer after seven years in the role.

    The company named William Oplinger as president and CEO, effective Sunday. Oplinger had served as Alcoa’s chief operations officer since February and before that as chief financial officer since November 2016.

    Alcoa’s stock
    AA,
    -5.20%
    dropped 5.1% in morning trading. That put it on track for the lowest close since March 1, 2021. It has tumbled 18% over the past three months and plunged 40.8% year to date, while the S&P 500
    SPX
    has rallied 12.8% this year.

    “In our opinion, investors have expressed concern around cash flow and the company’s medium to long-term outlook,” B. Riley analyst Lucas Pipes wrote in a note to clients. “While the timing of the transition is somewhat unexpected, we believe Mr. Oplinger is the most well-positioned candidate for the CEO role.”

    Harvey had been CEO since the company completed its separation from Arconic Inc. in November 2016. Arconic was acquired by Apollo Global Management Inc.
    APO,
    +1.55%
    in a deal that was completed in August 2023.

    “The transition of the president and CEO roles reflects the company’s succession planning process,” Alcoa said in a statement.

    “Our board believes Bill’s extensive experience with Alcoa makes him well-positioned to carry the company forward,” said Steven Williams, Alcoa’s board chair.

    B. Riley’s Pipes said that as Alcoa has faced challenging aluminum markets in recent quarters, and given the troubles associated with approvals of mine plans in Australia, he believes the change in leadership reflects the company’s desire to reposition its asset base for stronger cash-flow generation.

    “While Mr. Harvey has successfully transformed Alcoa in recent years, particularly as [Alcoa] has aggressively deleveraged, we believe the transition will be viewed favorably by investors,” Pipes wrote.

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  • Mobileye prices IPO above targeted range to raise nearly $1 billion, and most of it will go to Intel

    Mobileye prices IPO above targeted range to raise nearly $1 billion, and most of it will go to Intel

    Mobileye Global Inc. priced its initial public offering higher than its targeted range late Tuesday to raise nearly $1 billion, most of which will go to Intel Corp.

    Mobileye priced its initial public offering at $21 late Tuesday, the company announced in a news release, after previously stating a targeted range of $18 to $20; shares are expected to begin trading on the Nasdaq under the ticker symbol “MBLY” on Wednesday. Intel
    INTC,
    +0.85%
    will sell at least 41 million shares of Mobileye, which would raise $861 million, and also agreed to a $100 million concurrent sale of stock to General Atlantic, which would make the total raised at least $961 million.

    Intel paid $15.3 billion to acquire Mobileye in 2017, and was reportedly aiming for a valuation as high as $50 billion when originally planning this IPO, but instead will settle for a basic valuation of roughly $16.7 billion. After a record year with more than 1,000 offerings in 2021, the IPO market has largely dried up in 2022.

    Read: Mobileye IPO: 5 things to know about the Intel autonomous-driving spinoff

    Underwriting banks — Intel listed two dozen underwriters, led by Goldman Sachs Group Inc.
    GS,
    +1.13%
    and Morgan Stanley
    MS,
    +1.36%
    — have access to an additional 6.15 million shares for overallotments, which could push the total raised higher than $1 billion and make Mobileye the second-largest offering of the year. Only two offerings thus far this year have raised at least $1 billion — private-equity firm TPG Inc.
    TPG,
    +4.21%
    raised exactly $1 billion in January, and American International Group Inc. 
    AIG,
    -0.11%
    spinoff Corebridge Financial Inc.
    CRBG,
    +1.36%
    raised at least $1.68 billion in September.

    Intel will receive the bulk of the proceeds of the offering — after promising to make sure that Mobileye has $1 billion in cash and equivalents, the chip maker will take the rest of the proceeds for its own coffers. Wells Fargo analysts calculated that Mobileye will need about $225 million to hit that level, leaving at least $736 million for Intel before fees and other costs.

    Intel will also maintain control of the company after spinning it off, keeping class B shares that will convey 10 votes for each share while selling class A shares that convey one vote per share. Intel will retain more than 99% of the voting power and nearly 94% of the economic ownership of the company, and the Mobileye board is expected to include four members with ties to Intel, including Chief Executive Pat Gelsinger serving as chairman of the board.

    Read also: Intel files for Mobileye IPO, creating a share structure that will keep the chipmaker in control

    Mobileye will continue to be led by founder Amnon Shashua, who served as chief executive before Intel acquired the company and stayed at the helm while it was part of the Silicon Valley chip maker. Shashua founded Mobileye in 1999 and turned it into a pioneer in the field of automated-driving technology and one of Israel’s most prominent tech companies.

    Mobileye filed for the initial public offering at the end of September, when executives were still reportedly hoping for a $30 billion valuation.

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  • 8 Mining Stocks: Why Their Long-Term Outlook Is Bright

    8 Mining Stocks: Why Their Long-Term Outlook Is Bright

    The world needs metals like copper, iron, and cobalt, but investors don’t seem to need mining stocks. They should reconsider.

    Investor reluctance is understandable. Why get exposure to an industry whose profits hinge on the health of industrial activity when the global economy seems headed for a downturn that would probably send metal prices lower?

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