In a festive opening to the sale of its best known company, Saudi political and economic elite were out on Wednesday to show their full support for the sale of their country’s crown jewel.
Saudi Arabia’s Aramco oil company had its first IPO on Wednesday and is now being heralded as the world’s most valuable company with a worth of $2 trillion. This state-owned oil giant provides nearly 10% of the world’s oil supply and its sale of shares to private individuals and investors was always sure to illicit great interest. But does this IPO reflect the true value of the company or is it smoke and mirrors? Until this IPO is held on a Western stock exchange, we may never know.
Aramco is indeed a relatively well-managed and highly profitable company. With some of the world’s lowest cost production of oil in the world, solid portfolio diversification, and a history of apt management, it is no wonder that Saudi’s ambitious Crown Prince Mohammad bin Salman (known as MBS) chose to sell Aramco over other Saudi companies.