Discussion Board

Saudi Aramco IPO

As Saudi Aramco looks to sell 5% of its company's shares, questions rise about the operations of the company and what that will mean for investors. The world's largest oil producer, controlling 15% of the world's oil reserves according to the Wall Street Journal, was nationalized in the 1970's and has since disclosed all financials from public view. April of 2019, Aramco decided to release their financial status to the public, showing it is more profitable than Apple, Exxon Mobil, and many other major multinationals. The complicated relationship with the Saudi government, makes it much more difficult for investors to lock in on the IPO, and only raises more questions.

 

This complicated relationship is built on the company paying the government a "special dividend" which amounted in $20 billion. Many said this was to cover some debt the government had, but forces investors to ask the question of whether the company will still be aiding the government and if investors will see any of these dividends. I believe the public needs basic details on what the company exactly plans to do with paying dividends and to clearly establish the government's role in the company. This will clear the air and hopefully draw in more people to invest in the world's most profitable multinational.

 

https://www.wsj.com/articles/aramco-ipo-draws-bids-of-44-3-billion-as-global-investors-steer-clear-11575050532

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