The Most Profitable Company in The World is Gearing For This Record-Breaking Offering
When Chinese e-commerce giant Alibaba went public in 2014, it became the record holder as the world’s biggest initial public offering (IPO). But its spot at the top might soon be compromised when the Saudi-based petroleum and natural gas company, Aramco, launches its own.
Anticipated IPO
Earlier in November, Aramco, also dubbed as the most profitable company in the world, announced its plans of listing its IPO at the Saudi Stock Exchange (Tadawul). The plan pushed through on November 9 but trading would only officially begin in December of 2019.
According to sources, Saudi Arabia estimates the value of the company to be at around $1.5 trillion to $2 trillion. Its exact valuation would only be determined for sure though during the investor roadshow, according to company chairman Yasir Al-Rumayyan.
Hoping to get a piece of the company, many people have reportedly begun selling their other stocks. The Tadawul All Share Index also fell by 2.4% when the news of Aramco’s IPO made the news. Meanwhile, 0.5% of the shares have already been earmarked for individual retail investors. However, Al-Rumayyan says that the percentage of international and local investors is not yet determined.
Royalty-Proposed Idea
According to sources, the idea of Aramco going public initially came from Crown Prince Mohammed bin Salman himself some three years ago. After all, a majority of the oil giant is actually owned by the Middle Eastern country’s sovereign wealth fund.
It’s also worth noting that taking Aramco public is part of the kingdom’s plans to wean off their dependence on oil. The proceeds to be earned from the massive IPO would reportedly go towards the sovereign wealth fund, which is managed by Blackstone and Softbank.
Expected Effects
Numerous analysts predict that Aramco’s IPO would have significant effects on global oil markets as well as energy equities that they believe shouldn’t be taken for granted in favor of overvaluation. Since the company has gained a positive reputation as the best-run oil company in the Middle East, floating around even just a small 2% in the local stock exchange can eventually cause changes in the country’s oil policy in the future.
In connection with this, it might also end up facing pressure to make alterations in the way it operates from its potential outside investors. It’s likely that they would be gearing to increase Aramco’s short-term profits. This may mean postponing plans to expand their business segments in gas markets and global refining in favor of increasing production capacity.
Meanwhile, factors like the ongoing climate crisis, geopolitical risk, and low oil prices might actually deter a good number of investors from buying into the company.
More in Business
-
`
Streaming Giant Netflix Faces Yet Another Challenge
In the ever-evolving landscape of streaming entertainment, Netflix, once the unchallenged king of digital content, now faces a complex puzzle beyond...
December 1, 2023 -
`
Signs You Should Quit Your Current Job & Move On
You Don’t Feel Comfortable at Work Imagine spending the majority of your waking hours in a place where you feel uneasy,...
November 20, 2023 -
`
How to Adjust and Renew Your Portfolio
Investing in the financial world is like navigating an ever-changing landscape—constantly evolving, always shifting. The key to staying on track? Regularly...
November 18, 2023 -
`
Dr. Dre’s Divorce With Nicole Young: A Closer Look
When the beats of old-school hip-hop start bumping, Dr. Dre’s name reverberates in fans’ minds worldwide. Born as Andre Young, this...
November 12, 2023 -
`
Why Branded Content Is the Best Way to Connect With Your Audience
Have you ever found yourself deep in a compelling article or engrossed in a video series, only to later discover that...
November 5, 2023 -
`
Why the Gender Pay Gap Could Be Getting Worse | New Research Findings
At a time when women are making significant strides in various professional arenas, a new report throws light on a trend...
October 28, 2023 -
`
What Is a Bull Market and How Can Investors Benefit From One?
In finance, the term “bull market” is frequently used to describe a period of optimism, rising asset prices, and investor confidence....
October 19, 2023 -
`
A-List Power Couples Where the Women Make More Money
In an era of shifting gender roles and evolving definitions of success, it’s increasingly common to find celebrity couples where the...
October 15, 2023 -
`
Massive Price Cuts: Tesla Only Witnesses ‘Modest’ Sales Gain in China
Cutting Down Prices, But Not Cutting the Mustard? Summer 2023 brought with it a promise of sunshine and relaxation. For Tesla...
October 8, 2023
You must be logged in to post a comment Login