Most prized and shorted tech stock Mobileye caught in driverless war

Tel Aviv

FOR investors trying to divine the path to a driverless future, Mobileye NV has become a battleground. The Jerusalem-based maker of software for driverless cars went public in a US$1 billion offering in July 2014, the largest in Israeli history. Wall Street analysts backed the stock, which more than doubled to peak at US$64.14 a year later, giving Mobileye a market capitalisation of nearly US$14 billion. Then came the short sellers.

Bearish investors argue that Mobileye's valuation doesn't account for competition that will inevitably emerge. Alphabet Inc, the holding company that owns Google, plans to make its autonomous car unit a standalone company this year, and Nvidia Corp unveiled new chips with artificial-intelligence features at the Consumer Electronics Show in Las Vegas last week.