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Thursday, June 20, 2024

Saudi Aramco’s $12 Billion Stock Sale Completes Within Hours

Saudi Aramco’s $12 billion stock sale was oversubscribed shortly after it opened on June 2nd, selling out within hours. The government received demand for all 1.545 billion shares on offer, representing a 0.64% stake in the company, across the price range of 26.70 to 29 riyals per share.

Despite the strong demand, Aramco’s shares fell as much as 2.9% to 28.30 riyals on Sunday, valuing the company at around $1.8 trillion. The stock has dropped about 14% since the start of 2024 when the government first announced plans for the share sale.

Key Points

  • The $12 billion offering sold out within hours of opening on June 2nd.
  • 1.545 billion shares (0.64% stake) were sold at 26.70 to 29 riyals per share.
  • Aramco’s shares fell 2.9% to 28.30 riyals on the first day, valuing it at $1.8 trillion.
  • The stock is down 14% year-to-date after the sale was first announced.
  • Proceeds will fund Saudi Arabia’s economic diversification plans like Vision 2030.
  • Foreign investor participation is unclear, as many balked at the 2019 IPO valuation.

The sale aims to raise funds for Saudi Arabia’s economic transformation initiatives and diversification away from oil under Vision 2030. However, foreign investors had largely avoided Aramco’s 2019 IPO due to valuation concerns, leaving the government reliant on local buyers. Details on international participation in this latest offering are still awaited

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