Intel (INTC.US) "denies" equity spinoff rumors Mobileye (MBLY.US) jumps nearly 8% before the market open

Intel(INTC.US) said on Thursday that it has no plans to spin off its majority stake in self-driving car company Mobileye(MBLY.US), which had jumped more than 10% before the market opened, and as of writing, the stock is up nearly 8%, while Intel is up 2% before the market opens.

Earlier this month, reports emerged that Intel was considering selling some of its stake in Mobileye, which sent the stock tumbling. The stock has fallen more than 70% this year.

Intel said in a statement: "As the majority shareholder of Mobileye, Intel is steadfastly focused on value creation and is excited about the future of the business. We currently have no plans to spin out the majority of the company. Through the separation of Mobileye and the provision of autonomy, the company's ability to capitalize on growth opportunities is enhanced and it accelerates its path to creating greater value. We believe in the future of autonomous technology and the unique role of Mobileye as a leader in the development and deployment of advanced driving assistance systems (ADAS)."

Wall Street analysts responded somewhat positively to the move.

Intel acquired Mobileye in 2017 for $16.3 billion, but the self-driving car company went public through an IPO in which Intel spun off some of its stake, raising $861 million. Intel's annual report showed that as of December 30, the company held about 88.3% of the company's common stock.

Mobileye has been working to deal with the volatility in demand for its driving assistance chips, which it cut its annual revenue and profit expectations in August due to weaker international demand.

Intel has also been trying to turn its business around by focusing on its chip manufacturing division and artificial intelligence processors, but its stock has plunged in recent months amid layoffs, a dividend suspension, and the resignation of a high-profile board member.

Intel's CEO Pat Gelsinger made several statements earlier this week, including pausing construction of a factory in Europe to support the company's financial and technological strength amid pressure from shareholders over the stock's decline.

However, Intel's manufacturing business may get a boost after it announced on Monday a chip manufacturing deal with Amazon's(Amazon.com)(AMZN.US) cloud division, which the giant has been hoping to compete with rivals such as TSMC(TSM.US).