The Weekly Circuit
👋 Good Monday morning in the Middle East!
Amid the global market turmoil that has torn through technology stocks this year, Intel Corp.’s Mobileye provided some hopeful news at the end of last week when it filed with the SEC for its initial public offering. The Israeli developer of self-driving car systems, which Intel bought five years ago for $15.3 billion, is still assessing when to hold the IPO and how much it will seek to raise, The Circuit reports.
A rare level of consensus between Israel and Lebanon appears to be emerging around the proposed U.S.-brokered deal to demarcate maritime borders and share drilling rights to natural gas fields in the Mediterranean Sea. While Israeli Prime Minister Yair Lapid and Hezbollah leader Hassan Nasrallah sent positive signals about the draft agreement circulated by White House mediator and energy envoy Amos Hochstein, the deal is being denounced by former Israeli Prime Minister Benjamin Netanyahu, who says he won’t be bound by its terms if he returns to office after Israel’s Nov. 1 election.
While Qatar is a whirlwind of preparations for November’s World Cup soccer tournament, this week in the United Arab Emirates belongs to the NBA. As detailed in our culture section below, Dubai’s Burj Khalifa is flashing images of the league’s basketball stars on its 163-story facade in advance of the first NBA games in the Gulf, a pair of pre-season matches between the Atlanta Hawks and Milwaukee Bucks.
Welcome to The Weekly Circuit, where we cover the Middle East through a business and cultural lens. Read on for the stories, deals and players at the top of the news. Please send comments and story tips to [email protected].
Instead of our regular Monday delivery, the next issue of The Weekly Circuit will appear on Wednesday, Oct. 12, as we take a break for the Jewish holiday of Sukkot.
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Mobileye files for IPO amid barren Wall Street landscape
While stocks drop ever lower and corporate funding sources remain dry, investors saw some light last week when Mobileye, the Jerusalem-based chipmaker for self-driving vehicles that is owned by Intel Corp., filed for its long-anticipated initial public offering, The Circuit’s Jonathan Ferziger reports.
Still unanswered: When the IPO will take place and how much Mobileye will seek to raise on the Nasdaq remains unanswered. But the company’s filing of its S-1 preliminary prospectus with the SEC late Friday generated rare optimism during a tough year. “I am thrilled,” Michael Granoff, founder and managing partner of Maniv Mobility, told The Circuit. “Mobileye is the most impactful company that has ever been created in Israel, and its impact may grow manyfold in the years to come,” said Granoff, a veteran automotive technology investor who doesn’t hold an interest in the company.
Shrinking IPOs: If Mobileye starts selling shares before the end of 2022 as executives have indicated, it will be one of the biggest IPOs of the year. The IPO market has shrunk amid a 33% slide in the Nasdaq Composite Index since the end of 2021, a steady rise in interest rates and global tensions from the Russia-Ukraine conflict. According to the filing, the IPO is being led by investment banks Morgan Stanley and Goldman Sachs. Among the 24 financial advisors listed are Citigroup, Barclays, Evercore ISI and RBC Capital Markets.
Raising billions: Intel, which bought Mobileye for about $15.3 billion in 2017, had hoped to raise $50 billion with the IPO and has since trimmed the target to $30 billion, according to Bloomberg. Neither company has confirmed the report. Only two IPOs have raised $1 billion or more on New York exchanges since Jan. 1, compared with 45 in 2021.
Chips and software: Mobileye is one of the leaders in creating software, semiconductor chips, cameras and sensory arrays to enable the development of self-driving vehicles. Chief executives from the world’s largest car companies have made the pilgrimage to Jerusalem to see the company and meet with CEO Amnon Shashua. In Friday’s filing, Mobileye said that Intel CEO Pat Gelsinger will serve as chairman of Mobileye and that the board will include Jon Huntsman, the former governor of Utah. Huntsman, who previously served as U.S. ambassador in both Russia and China and was a Republican candidate for president in 2012, serves on the board of Ford Motor Co.
Read the full story here.
Lebanon gas compromise draws praise from Israel and Hezbollah
Israeli Prime Minister Yair Lapid and the leader of Lebanon’s Iran-backed Hezbollah organization offered praise for the terms of a U.S.-brokered deal to resolve a decade-long dispute over maritime borders and offshore gas-drilling rights, The Circuit reports. The proposed agreement over the Karish field in the Mediterranean Sea, the result of months of shuttle diplomacy by White House mediator and energy envoy Amos Hochstein, was presented to Lebanese President Michel Aoun on Saturday.
Safeguards interests: Lapid, speaking at a cabinet meeting in Jerusalem on Sunday, said that the agreement was undergoing legal review and would soon be submitted for government approval. “As we have demanded from the start, the proposal safeguards Israel’s full security-diplomatic interests, as well as our economic interests,” Lapid said in a statement. Although the text of the proposal has not been made public, the Israeli prime minister indicated he was willing to accept compromise in his country’s maritime borders and sharing of revenues between the two enemy countries.
Opening horizons: Hezbollah chief Hassan Nasrallah, who has threatened repeatedly to attack Israel’s shipborne platform if it begins extraction of the gas without a negotiated agreement, welcomed the latest proposal in a televised address as “a very important step” that may “open up wide horizons for the Lebanese people.” Hezbollah, which controls nearly half the seats in Lebanon’s 128-member parliament, is designated a terrorist organization by Israel and the U.S.
Netanyahu unbound: Israel’s opposition leader and former prime minister, Benjamin Netanyahu, said in a tweet that he would not be bound by the agreement if he returns to power after the country’s Nov. 1 elections.
Read the full story here.
Gaming Kingdom: Saudi Arabia plans to invest $38 billion to become a world leader in computer gaming, financing new companies through Savvy Games Group, which is owned by the kingdom’s Public Investment Fund.
Energy Pact: Morocco and Israel signed an agreement to cooperate on energy research, including development of rechargeable batteries, solar power and hydrogen energy generation.
Fan Flights: Saudia will operate several hundred extra flights to ferry Saudi fans to and from World Cup soccer matches in Qatar starting next month.
Free Trade: Israelis will no longer have to pay a 7% duty to buy South Korean cars when a free trade agreement the two countries signed takes effect Dec. 1.
Drug Trials: Israel’s AION biotechnology lab, backed by pharmaceutical companies including Pfizer, Merck and Teva, has formed a new startup, OMEC.AI, that will use artificial intelligence to assess drug efficacy in preclinical trials.
Digital Currency: Israel, Norway and Sweden are teaming up to explore how central bank digital currencies can be used for international payments.
Travel Expenses: TripActions, an Israeli-founded platform for managing corporate travel expenses, is planning an IPO in New York that would value the company at $12 billion.
Gulf Trains: Etihad Rail and Oman Rail signed a $3 billion agreement to build and operate a train system linking Oman’s Sohar Port to the UAE National Rail Network.
Pay Later: UAE-based payments platform and Egypt’s Paymob established a partnership that will allow Egyptian consumers make online purchases in installments.
Slowdown Fund: Venture capital firm 83North has raised a new $400 million fund that it will invest in startups in Israel, the U.S. and Europe while markets are in a slowdown.
Fintech Startups: Abu Dhabi’s Further Ventures is setting up a new $200 million fund to invest in early-stage startups focused on digital assets and fintech.
Drilling Shares: Delek Corp.’s NewMed Energy, which holds drilling rights to Israeli offshore gas fields, will sell shares on the London Stock Exchange through a reverse merger with the UK’s Capricorn Energy.
Try It On: Walmart is using technology from its acquisition of Israel’s Zeekit to let customers’ try on clothes virtually and download photos of themselves to see how they look.
On the Circuit
Alex Mashinsky,the Israeli-American CEO of Celsius Network, resigned two months after the cryptocurrency lender filed for bankruptcy in July.
Yousef Abdullah Al-Benyan, stepped down as CEO of Saudi Basic Industries Corp., or Sabic, after being appointed the kingdom’s new education minister.
Novak Djokovic, the Serbian tennis star, beat Marin Cilic in straight sets on Sunday to win the Tel Aviv Watergen Open after being barred from the U.S. Open in New York because he refused to get a COVID-19 vaccination.
Ahead on the Circuit
Oct. 10-13, Dubai, UAE: Gitex Global. Investors, technology leaders, corporate CEOs and government officials get together for leading Gulf technology event. Dubai World Trade Centre.
Oct. 18-20, Eilat, Israel: Sea the Future. First annual conference on sustainable aquaculture and food from arid climates. Herods Boutique Hotel.
Oct. 25-27, Riyadh. Future Investment Initiative. Conference bringing together CEOs, policymakers, investors to discuss the future of international investment and the global economy. King Abdulaziz International Conference Center.
Nov. 17-18, Abu Dhabi, UAE. Milken Institute Middle East and Africa Summit. Government officials, business leaders, economists examine region’s most pressing challenges and opportunities. Rosewood Hotel.
Standing Tall: Dubai’s Burj Khalifa tower, the tallest building in the world, is flashing images of star U.S. basketball players along the length of its 163-story facade to promote this week’s NBA Abu Dhabi Games 2022, the league’s first games in the Gulf. The Atlanta Hawks and the Milwaukee Bucks, which won the title in 2021, will play two pre-season games at Etihad Arena in Abu Dhabi on Thursday, Oct. 6, and Saturday, Oct. 8.
Enchanted Forest: Tel Aviv’s MUSA Eretz Israel Museum of Art is featuring “The Art of Enchantment,” an exhibition celebrating native cultures around the world. At the center of the show is the monumental installation by Brazilian artist Ernesto Neto, “Paxpa – There Is a Forest Encantada Inside of Us,” a contemporary work rooted in the Amazon, in which a shaman charges the tribe’s ritual house with powers and shares the cosmic knowledge of his ancestor. Special family activities will take place at the exhibition from Oct. 11-15 during the holiday of Sukkot.