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Saudi Aramco IPO

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Re: Saudi Aramco IPO

Unread postby kublikhan » Sun 03 Nov 2019, 13:23:46

Something is broken in this thread. I can only see the last page. Pages 1-3 display nothing.
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Re: Saudi Aramco IPO

Unread postby Tanada » Mon 04 Nov 2019, 08:38:11

kublikhan wrote:Something is broken in this thread. I can only see the last page. Pages 1-3 display nothing.


Fixed, thanx for the heads up. When Pstarr was deleted by the glitch a few months back it messed up every thread he had posted to before he was deleted. I tried fixing all the active threads but obviously I missed this one. He had circa 20,000 posts and there is no way I am going through the archives to fix them all but if you see another active thread that is acting funny give me a heads up so I can give it a look see and attempt repairs.

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Re: Saudi Aramco IPO

Unread postby kublikhan » Mon 04 Nov 2019, 13:46:40

Plantagenet wrote:Things get discussed and debated at Peak Oil for years, and its rare that someone is proved to be completely right in everything they said. However this is such a time, and I want to take a victory lap here and now to celebrate the absolute correctness of everything I've posted about on this topic. For years I've maintained that the Saudi Aramco IPO would never get done in New York or London or any other major global exchange because the Saudis wouldn't be willing to go through the public disclosure process that is required.
Everything you said about this topic came true? You were saying the IPO would never get done at all. Now that it is happening you want to do a victory lap? Seems like eating a plate of crow is more appropriate.

Plantagenet wrote:The WSJ is reporting that Saudi Arabia is not going to go through with its plan to sell shares in Aramco and its oil assets
...
Just five days ago KSA said they could raise their production by 2 million bbls/day to 12 million barrels/day. Now they are saying forget about that--- they can't do it. And whats more, forget about the IPO they've been preparing too. They're not going to do that either.
...
insiders at ARAMCO say the IPO will never happen. I don't get why people don't understand the significance of this. The WSJ has written an article giving us a peek inside the secretive world of ARAMCO and KSA. The WSJ article provides early warning the world that the KSA IPO isn't likely to happen. Yes, it hasn't been officially cancelled yet---thats why the WSJ story is such big news. Its whats called a "scoop" by newsmen. The WSJ is breaking an important inside story here. Its like the stories warning that ENRON was about to collapse before it collapsed....knowledge is power and getting the info first is very powerful. IMHO People should pay attention to good journalism like this.
...
the WSJ just reported that ARAMCO insiders actually want the IPO called off.
...
they probably won't do the IPO.
...
Actually, ARAMCO has so far failed to successfully offer its IPO and appears to be on the brink of abandoning their plan to do an IPO at all.
...
according to the WSJ some top officials at ARAMCO don't want the IPO to happen at all.
...
the WSJ and other media sources are reporting that the ARAMCO IPO is likely toast anyway.
...
ARAMCO insiders are leaking to reporters at WSJ and elsewhere the news that the IPO ain't happen
...
Your conspiracy theory seems rather unlikely to me, for three reasons. (1) People aren't going to buy the WSJ if it gets caught making up imaginary sources and reports fakes news. There are no incentives for the WSJ to do it, and lots of incentives so they won't make things up. The New York Times has gotten caught doing that sort of thing, but the WSJ is pretty reliable, IMHO. And (2) the same story about insiders at ARAMCO saying the IPO is dead has appeared in other financial news papers and news magazines as well so its not just the WSJ reporting this.
...
Notice how the oil analyst in this CNBC segment actually snorts in disbelief that anyone could be so dumb as to think the ARAMCO IPO is going to happen.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 04 Nov 2019, 14:50:16

kublikhan wrote:
Plantagenet wrote:
Plantagenet wrote:The WSJ is reporting that Saudi Arabia is not going to go through with its plan to sell shares in Aramco and its oil assets
...
the WSJ just reported that ARAMCO insiders actually want the IPO called off.
...
they probably won't do the IPO.
...
Actually, ARAMCO has so far failed to successfully offer its IPO and appears to be on the brink of abandoning their plan to do an IPO at all.
...
according to the WSJ some top officials at ARAMCO don't want the IPO to happen at all.
...
the WSJ and other media sources are reporting that the ARAMCO IPO is likely toast anyway.
...
ARAMCO insiders are leaking to reporters at WSJ and elsewhere the news that the IPO ain't happen....


You are normally a fairly sharp person, kublikhan, but this time you really don’t get it. The discussion you are quoting began several years ago when Saudi Aramco first proposed doing an IPO in New York or London. There were numerous discussions through the years about Saudi Aramco’s proposal to do an IPO several years ago on a major stock exchange like New York or London. MY position was that this was unlikely to happen. ANd in case you didn’t notice....IT DIDN’T HAPPEN.

I’m surprised that you don’t understand that just as the Wall Street Journal and I predicted back then, it didn’t happen. Perhaps you didn’t notice, but I was right——the IPO didn’t get done as planned in New York or London or Paris or Tokyo or in Beijing or on any major exchange.

Year after year the long promised IPO for New York or London or somewhere was discussed, and it didn’t happen.

Now, four years after Saudi Aramco first proposed doing their IPO on a major stock exchange, the Saudis have given up. They were unable to do their IPO on a western exchange, mainly because the disclosure requirements were too much for them. Again, just as I predicted.

I despair of you, Kublikhan. Time has marched on. Saudi Aramco failed to do their IPO in New York as they planned. The WSJ and I were 100% correct. I suggest you face the facts and admit it. :) :-D 8) :roll:

———————————————-

So what’s happening now?

The latest news is that the Saudis have conceded failure on their plan to do their IPO in a major stock exchange, and will instead do the IPO on their own tiny stock exchange in Saudi Arabia, where the ROyal Family can directly influence the process and where disclosure rules are weak to non-existent.

One of the more interesting things about this new plan is that the valuation of the IPO has now become very controversial. Prince Muhammad is predicting a two trillion dollar valuation, but western banks are lower....as much as 25% to 50% lower on the low side.

Of course, when you do your IPO on a podunk local stock exchange where you control the financial disclosure requirements and there is no independent media reporting and your main refining facility was just blown up by some mysterious rocket attack, there is likely to be some concern among investors about the nature and value and inherent risk of the IPO.

Another factor is that Saudi Aramco lost so much time in their failed efforts to do the IPO in New York that the global IPO market has now cooled off. The bottom line here is that questions raised by the long delay and the now the fact that Saudi Aramco has been reduced to doing the IPO on the teeny tiny local Saudi stock exchange may cost them as much as 500 billion to one trillion dollars in market value for the IPO.

The loss of a few hundred billion or even a trillion dollars might not be a big thing to you, but If this IPO goes badly, the Saudis will regret their inability to do a more conventional IPO in a better regulated and more prominent international Market like NEw York or London. :P 8) :lol: :twisted: :roll:


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Re: Saudi Aramco IPO

Unread postby kublikhan » Mon 04 Nov 2019, 15:59:15

Those quotes are from last year, 2018. And they quote you talking about the IPO being toast, dead, not happening at all. Now you are back pedaling trying to say you only meant it wouldn't get done in New York or London. Hell just 2 months ago you said the IPO most likely won't happen for years. These are the predictions you are doing a victory lap about?
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 04 Nov 2019, 16:05:24

I’m surprised that you don’t understand that just as the Wall Street Journal and I predicted back then, it didn’t happen. Perhaps you didn’t notice, but I was right——the IPO didn’t get done as planned in New York or London or Paris or Tokyo or in Beijing or on any major exchange.

No, you claimed that the IPO was canceled entirely. It wasn’t, it was postponed as Aramco had said all along. And from the very start Aramco talked about starting with a listing on the SA exchange followed by listing on an International exchange. That has not changed, not one iota. But you are pretty good at attempting to reinvent history.

The latest news is that the Saudis have conceded failure on their plan to do their IPO in a major stock exchange, and will instead do the IPO on their own tiny stock exchange in Saudi Arabia, where the ROyal Family can directly influence the process and where disclosure rules are weak to non-existent.


Apparently you are having problems with reading comprehension. Aramco and the oil minister have both said this is the first step. They will evaluate and then decide on when and where to list Internationally. With a goal to listing 5% of the company it can’t all be done on the Saudi exchange which is why they are starting with 1% - 2%. Perhaps you can show us where Aramco stated they attempted to do an IPO in New York or London but failed? They haven’t so don’t bother looking for it.

Of course, when you do your IPO on a podunk local stock exchange where you control the financial disclosure requirements and there is no independent media reporting and your main refining facility was just blown up by some mysterious rocket attack, there is likely to be some concern among investors about the nature and value and inherent risk of the IPO.


Again short term memory and illiteracy seem to have created a problem for you. The finances of the company are already out there, they were audited along with the reserves and posted for anyone who wanted to read them when the Bond was issued on international markets this year so there is nothing that they can hold back at this point in time. Saudi production is almost back to where it was before the attacks which means there should be no impact on the finances or reserves from this point forward. And as to "podunk" the Tadawul is the largest capital market in the Middle East and Africa and with the Aramco IPO which could make up 5% of its market it will become quite significant globally.

Another factor is that Saudi Aramco lost so much time in their failed efforts to do the IPO in New York that the global IPO market has now cooled off. The bottom line here is that questions raised by the long delay and the now the fact that Saudi Aramco has been reduced to doing the IPO on the teeny tiny local Saudi stock exchange may cost them as much as 500 billion to one trillion dollars in market value for the IPO.



Haven’t been reading anything then?. The international IPO is not “failed”, it is on hold. All of the work to get that done is pretty much accomplished with the financial and reserves audits. The initial IPO on the local stock exchange is an attempt to gage demand and set valuation which will go a long way to making an international IPO successful. If you think the Saudi IPO will be undersubscribed, you need to give your head a shake. I had a brief conversation with an investment banker this morning and his comment was his firm has seen very high interest and will be putting in an order. It will be the largest listed company in the world so its shares can't help but be attractive, especially considering they are looking at a 3.6% dividend yield. He expects they will get no more than 10% of what they are asking for given the high demand and the fact Saudi insiders will get some preference.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 04 Nov 2019, 17:47:55

kublikhan wrote:Those quotes are from last year, 2018.


In January 2016 Prince Muhammad announced his plan to have Saudi Aramco do an IPO in New York or other major international marketplace. Do I even have to explain to you how the calendar works? That's almost four years we've been talking about this same topic.

kublikhan wrote:they quote you talking about the IPO being toast, dead, not happening at all... Now you are ... trying to say you only meant it wouldn't get done in New York or London.


Thats because from 2016 to the first half of 2019 Saudi Aramco insisted they were going to do an IPO in New York or London, and I (and most financial analysts like those I quoted from the WSJ) felt that would never happen. And indeed it didn't happen.

kublikhan wrote: These are the predictions you are doing a victory lap about?


Yes, precisely. I maintained for years (along with many financial journalists) that Saudi Aramco would never do the IPO they proposed to do in New York, London or other major market because they would balk at meeting the disclosure requirements.

And now we see they have given up that plan. Thats means I was totally right!

And another thing.....those disclosure requirements are key here. In addition to not understanding what the discussion was about, you also seem to have been totally oblivious to the reasons I posted explaining why Saudi Aramco would never be able to do an IPO in New York or London. Major open markets like those in New York or London have DISCLOSURE REQUIREMENTS. Companies are required to disclose all relevant financial information before they are allowed to go ahead with their IPOs. Prince Muhammad and the Saudi Royal family don't want to disclose the amount of control they have over Saudi Aramco. They want to pretend that its an independent company like any other company, and that future business decisions will be made purely in the interest of the company. But this isn't true. Saudi Arabia is a monarchy and the Royal family basically controls and largely owns Saudi Aramco and at any time they can make Saudi Aramco do anything they like.

Thats why they have given up their plans and are now listing on the teeny tiny Saudi stock exchange...the saudi royal family also has a great deal of influence there, so they won't have to make a full financial disclosure to do the IPO in Saudi.

I have to tell you it feels very good to be totally vindicated in my views and in four years (!) of my past posts in this thread. Its a rare thing to argue over a topic with ill-informed people for four years and then to be proven totally and completely correct. It feels FANTASTICALLY GOOD!

Image
It feels so GOOD to be proven totally and completely CORRECT! Unnnh! Unnnh! Watch me now. Work it on out. Lets hear a base line from the band. Now how about that rhythm guitar. Drums set down the beat. OK. Here we go. I"m GOOD. I'm GOOD. I'm RIGHT! I'm proven RIGHT! FEELS so GOOD! FEELS so RIGHT! YEAH! YEAH! YEAH!

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 04 Nov 2019, 18:02:10

Thats because Saudi Aramco was proposing to do an IPO in New York or London, and I (and most financial analysts like those I quoted from the WSJ) felt that would never happen. And indeed it didn't happen.


They said right out of the gate that they would consider doing an IPO on the Saudi market along with an international IPO. This is not an either or situation. You have selective memory.

Yes, precisely. I maintained for years (along with many financial journalists) that Saudi Aramco would never do the IPO they proposed to do in New York, London or other major market because they would balk at meeting the disclosure requirements.

And now we see they have given up that plan.


I just quoted for you Aramco stating they are still looking at an International IPO. They want to sell 5% of the company to the market and are only doing 1-2% on the Tawadul. Is your math that bad? Please show us a quote from Aramco or the ministry stating they are not going to pursue an international listing? Otherwise please just shut up, your antics and nonsense are tiresome.

In addition to not understanding what the discussion was about, you also seem to have been totally oblivious to the reasons I posted explaining why Saudi Aramco would never be able to do an IPO in New York or London. Major open markets like those in New York or London have DISCLOSURE REQUIREMENTS. Companies are required to disclose all relevant financial information before they are allowed to go ahead with their IPOs. Prince Muhammad and the Saudi Royal family don't want to disclose the amount of control they have over Saudi Aramco. They want to pretend that its an independent company like any other company, and that future business decisions will be made purely in the interest of the company. But this isn't true. Saudi Arabia is a monarchy and the Royal family basically controls and largely owns Saudi Aramco.


OK. How short term is your memory? Just a few pages back in this discussion the full prospectus from Aramco’s bond issue was discussed. It is a public document that many of us have read. It describes in detail the last 3 years financials and the D&M reserve audit results. You were involved in that discussion and now pretending it didn’t happen? Just like you are pretending you never said the IPO was canceled? All of the disclosure required to list anywhere is already in the public through the Bond prospectus. There is nothing left of any material value that can be hidden. The only difference with the Tawdul vs other regulators is in the degree of continual disclosure. And the number of shares that the Saudi family own doesn’t change whether it is listed just in Saudi or anywhere else. It is those shares that govern their voting power. The government will always own the majority of shares….it doesn’t matter where it is listed.
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Re: Saudi Aramco IPO

Unread postby kublikhan » Mon 04 Nov 2019, 18:57:22

Rockdoc is right, you are trying to reinvent history Plant. You said the IPO was dead. It wasn't. So now you are pretending you never said it was dead, only that it wouldn't be listed in New York or London. That doesn't match your prior statements on this topic. Further, your posts have degraded into the downright juvenile level.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 04 Nov 2019, 23:00:54

You'll just have to wallow in ad homs all alone.

IMHO that kind of thing is a waste of time. :lol: :lol: :lol: :lol:

Cheers!
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 04 Nov 2019, 23:03:25

Forbes has just published an interesting article stating that Uncertainty looms as Saudi Aramco moves towards doing an IPO on the tiny Tadawul stock exchange.

saudi-aramco-ipo-Tadawul-stock-exchange

Again, the financial journalists at FORBES are concerned about the exact same things I've been pointing out......the lack of disclosure necessary to do an IPO on the tiny Tadawul stock market makes this IPO much different then a typical IPO done in New York or London. While companies normally have to make full disclosures of their books before going public, in this case key metrics are still shrouded in secrecy IN particular, Saudi Aramco has not revealed to potential investors key details around net income figures or fully laid out the role of the royal family in Saudi Aramco, including how much control the Royal Family has over business decisions.

Its not even clear if the few metrics Saudi Aramco has released can be trusted, since there is no independent verification being done by the Saudi stock exchange.

This is precisely why I maintained that the Saudi Aramco IPO would never be done on a major western stock exchange like the New York stock exchange....the Saudis have never released all the financial data necessary to comply with US laws.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 04 Nov 2019, 23:15:00

Again, the financial journalists at FORBES are concerned about the exact same things I've been pointing out......the lack of disclosure necessary to do an IPO on the tiny Tadawul stock market makes this IPO much different then a typical IPO done in New York or London.


OK. This is getting frustrating, its like dealing with a little kid. I already pointed out that Aramco has stated the prospectus for the IPO will be out on November 9th. All valuation details will be released at that time as they normally would be. And as always either your reading comprehension is exceptionally poor or you just like to make crap up. The article did not state anything about "the lack of disclosure necessary to do an IPO on the tiny Tadawul stock market", what it said was investors were not yet aware of certain information....as they normally wouldn't be until the freaking prospectus is released. Why would you think otherwise? And once again.....everything regarding Aramco's finances and reserves has already been released this year in the prospectus for the international bond. All that is missing with regards to this IPO is the details regarding what value investors should expect for their share ownership.

Its not even clear if the few metrics Saudi Aramco has released can be trusted, since there is no independent verification being done by the Saudi stock exchange.


where does it say that anywhere? Certainly not in the article you posted. You just made that up.

The only independent verification anyone needs is on the finances of the company three years of which have been audited and that audit was released as part of the bond offering and the amount of reserves the companies has and that was also audited by D&M and released in the same bond prospectus. Details regarding any specifics with respect to this particular IPO will be released in the prospectus in a months time and the price will be set soon after that. This is the way all IPO's work.
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 10 Nov 2019, 11:27:08

The Aramco IPO prospectus was released on Sunday. It is a very large document (several hundred pages) and has a considerable amount of detail. As I mentioned earlier there is as much disclosure in this document as you would expect to see in any prospectus on any exchange. My guess is Aramco did this on purpose as when they list on an international exchange sometime in the future (at least 12 months out) they won't have to work from scratch as much of this is "boilerplate".
The include financials from 2016 through to end 2018 and for the first half of 2019. The also include all of the results of the reserve audit that has previously been released in the bond prospectus earlier this year.
Some interesting points I noted scanning through the document:
- there are two tranches of shares made available. Institutional investors and private investors. Institutions are required to elect a certain amount of shares and Aramco will decide how much they actually get. Those institutions, of course, would sell those shares on a secondary market under the same rules they are strapped with. Private investors are limited to Saudi nationals.
- shares must be held for 6 months before they can be sold. Aramco is restricted from issuing new shares for a period of 12 months
-pricing and number of shares will be determined once the election period is complete
- Aramco is releasing less than 1% of its shares on the market in this IPO. We will know what the price is and number of shares which will then tell us how much the company is worth
-one of the unusual provisions in the prospectus is that as a minority shareholder you give up some rights that you would normally have with other companies. As an example Aramco retains the right to move investments from one sector to another as well as adjust dividend payments without seeking shareholder approval. They state the reason for this is that as a member of OPEC they are forced to make certain adjustments from time to time.
- they released both recoverable oil reserves and in-place reserves which I found interesting. It turns out that overall they are anticipating a 62% ultimate recovery factor. That is probably reasonable given they expect to see 70% or sightly greater from Ghawar and several other fields based on laboratory and modeling studies.
-they spend some time talking about risks which include risk of war, insurgence etc. Something you wouldn't find in a large North America O&G companies prospectus
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 10 Nov 2019, 12:21:53

You missed the most important piece of data in the prospectus.

Saudi Aramco revealed in the prospectus that their profit for the most recent quarter fell by 30% when compared to the same quarter last year. A 30% drop in profits is a big deal.

aramcos-profit-slide-shows-scale-of-risk-for-investors

The huge 30% drop in profits reflects lower oil prices and the recent Iranian attacks on Saudi Oil Facilities. Its very bad timing for Saudi Aramco, as normally a company doing an IPO wants to portray themselves as a safe haven having a good track record of GROWING profits, not a declining profitability of 30%.

This just highlights the degree of risk involved in investing in the Saudi Aramco IPO. Its well known that the company is controlled by Prince Muhammad and the Saudi Royal Family and is run for the benefit of the royal family rather then for the benefit of shareholders---but the degree and nature of this control still hasn't been revealed. Add to this the failure of Saudi Aramco to successfully do their IPO on a major western stock exchange and instead list the IPO on the tiny Saudi stock exchange, which is also strongly influenced by the Saudi royal family and which will not require full disclosure of the corporate governance of Saudi Aramco. And combine it all with what has been revealed, i.e. that the profitability of Saudi Aramco took a big hit after the the recent Iranian missile attack, and the new prospectus does little to calm investor's fears over the inherent risks in the Saudi Aramco IPO.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 10 Nov 2019, 12:43:02

This just highlights the degree of risk involved in investing in the Saudi Aramco IPO. Its well known that the company is controlled by Prince Muhammad and the Saudi Royal Family and is run for the benefit of the royal family rather then for the benefit of shareholders---but the degree and nature of this control still hasn't been revealed. Add to this the failure of Saudi Aramco to successfully do their IPO on a major western stock exchange and instead list the IPO on the tiny Saudi stock exchange, which is also strongly influenced by the Saudi royal family and which will not require full disclosure of the corporate governance of Saudi Aramco. And combine it all with what has been revealed, i.e. that the profitability of Saudi Aramco took a big hit after the the recent Iranian missile attack, and the new prospectus does little to calm investor's fears over the inherent risks in the Saudi Aramco IPO.


read the prospectus rather than cherry-picking some press info. The degree and control of the company is all outlined in the prospectus if you bothered to read it....not a lot different than any major public corporation. Main shareholder will have most votes (as they would in any company) and the main shareholder is the Saudi Gov't. No big surprise there. And the corporate governance has to be disclosed to all shareholders once the shares are traded most of it is included in the prospectus already. That is standard anywhere. You just make crap up all the time with zero knowledge of how any of this works.

And they didn't "fail to do a successful IPO on a major western stock exchange" ....they investigated it and have postponed that while they pursued the acquisition of SABIC and the initial listing on Tadawul. There is no statement by Aramco that they will not do an international dual listing and in fact they have said recently they will continue to evaluate which exchange they might list on. All along they have had as a goal 5% share sale and this listing will only account for 1% meaning the rest will have to be listed on one or more large liquidity international exchanges. The whole point of putting out a small part of the company now is to test the market and get a valuation. If they get the valuation they want in 12 months time they will almost certainly list another percentage of the company on the market. Why wouldn't they? And you are overplaying the impact of the attacks on Saudi infrastructure. They got back production fairly quickly and expect 4th quarter to be more in line with yearly net earnings. This is not a long term impact but rather an impact on quarterly performance. They outline the risks associated with war and security in some detail in the prospectus.

Bottom line is if you don't want to invest then don't (I suspect you wouldn't be able to anyway). The prospectus lays out a significant amount of detail regarding the companies finances and reserves as well as it's operations, as much as any prospectus I have seen over the years. This gives one the information they need to make a risk/reward decision. To my mind the huge reserve base still remaining, the very strong cash flow and low operating costs they see and the fact demand for oil and gas is not going to go away anytime soon offsets the risks of insurgency and terrorism to a considerable extent.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 10 Nov 2019, 14:02:44

rockdoc123 wrote:The degree and control of the company is all outlined in the prospectus ....not a lot different than any major public corporation.


Image

Thats very funny. :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:

How many "major public corporations" can you name that are controlled by a royal family and managed for their benefit? :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 10 Nov 2019, 14:48:08

How many "major public corporations" can you name that are controlled by a royal family and managed for their benefit? :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:


do you understand anything about public companies? It doesn't matter who the major shareholder is....in this case the government of Saudi Arabia, they have controlling vote.

In the case of Saudi Arabia this is not going to be different for the average Saudi....they will still live in a society where they pay no taxes, have heavily subsidized food and fuel etc. The non-nationals will still get them same relatively crap deal they have always had other than the fact they are being paid about double to do jobs they would have a hard time getting elsewhere. If you buy shares your rights are spelled out for you in the prospectus, you know what you are getting into.

Not sure what you think is going to happen. What is it you think the major shareholder is going to do? If he decreases dividends then that is hurting him way more than anyone else. He can't just take money from the company because it is now public, the only way he can take money from Aramco is through their annual taxes or through dividend payments. If he increases dividend payments then that applies to all shareholders so that is good for outsiders as well. He isn't going to force Aramco to do something that won't make money as that would negatively affect the tax payments.

You obviously haven't thought any of this through...or maybe you are just incapable of putting together the brain cells required to analyze the offer properly.

Once again, nobody is telling you to buy shares (which you couldn't do anyway). I'm of the opinion the share offering is going to be oversubscribed and the share price and the total number of shares eventually offered commensurate with about a $1.5 - $2 billion corporate worth.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Sun 17 Nov 2019, 15:24:13

Saudi Aramco sets value at 1.6 to 1.7 trillion---well below Prince Muhammad's long-stated claim that Saudi Aramco is worth 2+ trillion

aramco-ipo-prices-1.7-trillion-below-mbs-price-range-will-be-hard-sell-

Given the lack of disclosure required to list on the teeny tiny Saudi exchange, which is controlled by the Saudi Royal family anyway, potential investors have concerns about this IPO and the role of the Saudi Royal family in controlling saudi Aramco, resulting in a huge drop in the amount of money the Saudis will be able to get from the IPO. In addition, Reuters reports that Saudi Aramco has now given up entirely on the idea of eventually listing their IPO shares in New York (see news in the same link above). Well howdy. How about that------that confirms once again that I've been right all along in my posts here that Saudi Aramco would never be able to list in New York. I think I'll take another victory dance on this latest news!

Image
Yoooo Ahhhhh Eeeeee Meeee I'm proved right again! Waaaa Hooo Haaaa Haaaa Haaaa Haaa! I'm dancin'! I be dancin'!

Cheers!
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 17 Nov 2019, 20:31:06

Given the lack of disclosure required to list on the teeny tiny Saudi exchange, which is controlled by the Saudi Royal family anyway, potential investors have concerns about this IPO and the role of the Saudi Royal family in controlling saudi Aramco, resulting in a huge drop in the amount of money the Saudis will be able to get from the IPO


And once again your complete illiteracy comes to the forefront. Did you even look at the prospectus? Apparently not it is several hundred pages long and has more full disclosure of finances, reserves, what their business units are engaged in, share holder, corporate governance than literally any prospectus I have seen issued on New York, London, TSX of Singapore, and I have seen lots of them. Please show us what exact disclosure is missing from the prospectus, be specific point to the pages in the prospectus that are missing. Arm waving doesn't work here.

The concerns that are out there are lingering concerns around security but mostly it has to do with valuation. All along, from the very first day that Aramco announced they would seek an IPO financial analysts around the world have suggested that the valuation would be below $2 MM but most thought it would be half. It seems to me you do not understand how valuation is arrived at. The company issues the IPO and then waits to see how much uptake they have from various parties at which point they decide on how many shares will be issued and what the price will be. Only 1/3 of the 1.5% of all shares will be available to individual investors with the bulk being institutional investors who have already placed orders that they will not walk away from, in essence they control the perception. We have been through a period of sustained lower oil price which impacts directly on the valuation and geopolitical risk (Iran, Yemen etc).

But the comment that needs to be made is ....so frigging what? At $6 to %6.54 trillion riyals Aramco becomes the largest company in the world and at $25 billion raised the IPO would outpace Alibaba, making it the largest IPO in history and they have not yet dual-listed which they will most certainly do at some point due to the low liquidity on the Saudi exchange. Going for a slightly lower valuation makes a lot of sense given how IPO's have been largely poorly subscribed over the past 3 years, mostly due to companies that were seeking valuations much higher than made sense. As a consequence when the shares become free trading the price drops like a rock. SA and Aramco do not want that to happen and the best way to ensure continued buying when the market opens for free trading is to have a modest IPO valuation.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 18 Nov 2019, 14:32:07

The Saudi Aramco IPO is running into more trouble. Not only did they fail to list the IPO on a major western exchange as they proposed JUST AS I PREDICTED HERE ON THE PAGES OF PEAKOIL.COM FOR THE LAST SEVERAL YEARS, but they have just cancelled the "roadshow" they were going to present in New York and London to entice western institutional investors to invest in the IPO which has now been relegated to the teeny tiny Saudi Arabian stock exchange.

aramco-cancels-ipo-roadshow-us-and-london

So first they cancelled their plans to list the IPO on a western stock exchange JUST AS I PREDICTED HERE ON THE PAGES OF PEAKOIL.COM FOR THE LAST SEVERAL YEARS and now the Saudis have even cancelled the presentations they had scheduled about their IPO on the teen tiny Saudi Arabian stock exchange. Cancelling their own presentation on the upcoming IPO is making the Saudis look bad. The financial media is suggesting it was cancelled because the Saudis don't want to answer the inconvenient questions about reserves and management and ownership structure and such that they would get from western investors. But if the Saudis don't get big institutional investors to commit, then the value of the IPO may tumble still farther below the original 2+ trillion dollar valuation ----which has already been cut to ca. 1.7 trillion.

This is getting very interesting.

Cheers!
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