Updates
October 23, 2019: IPO delayed; doubts grow.
July 5, 2018: doubts grow that that the Aramco IPO will ever happen. -- The WSJ.
June 21, 2018: update -- the IPO may be delayed "beyond 2019."
April 27, 2016: oilprice.com take on the IPO.
April 26, 2016: this is how the IPO will be worked. 3% of the two-trillion-dollar company = $60 billion. Of that $60 billion, $40 billion will be "A" stock and $20 billion will be "B" stock. At $1 million/share, 40,000 "A" shares will be offered. "B" shares will be offered to the masses for $1,000/share (20 million shares). If SAO offers only million-dollar A shares, hedge funds will buy the shares, slice and dice them, re-package them, and re-sell them to the masses.
The IPO will be oversubscribed and SAO will increase the offering from 40,000 "A" shares to 60,000, and from 20 million "B" shares to 50 million "B" shares. (It's possible SAO will offer "B" shares at $100 vs $1,000 but if SAO wants to maintain a certain cachet as a platinum company, it will hold at $1,000 for the "B" shares.) [60,000 * $1 million = $60 billion; 50 million * $1,000 = $50 billion; for a grand total of $110 billion +/- $10 billion.]
Note: this is not an investment site. So not make any investment, financial, travel, or relationship decisions based on what you read here or what you think you may have read here. The note above is purely fictional or conjecture or fantasy.
Original Post
Saudi Arabia plans to sell less than 5 percent of its state oil company Saudi Aramco through an initial public offering (IPO), Deputy Crown Prince Mohammed bin Salman said on Monday.4% of $2 trillion = $80 billion.
He said in a television interview he expected Aramco, the world's biggest energy company, to be valued at more than $2 trillion and that he wanted it to be transformed into a holding company with an elected board.
Subsidiaries of the company would also be sold by IPO, as part of a privatisation drive and to bring more transparency to the oil giant, Prince Mohammed said.
"If one percent of Aramco is offered to the market just one percent it will be the biggest IPO on earth," he said.
Aramco was once run by Americans but has long been a Saudi state corporation. It dwarfs all in the industry, with crude reserves of 265 billion barrels, more than 15 percent of global oil deposits.
It produces more than 10 million barrels per day, three times as much as the world's largest listed oil company, ExxonMobil, while its reserves are more than 10 times bigger. If Aramco were ever to go public, it would probably become the first company to be valued at more than $1 trillion.
It seems "they" have to raise a lot more cash than that considering how much they've lost this past year, but maybe I'm missing something ... maybe a bunch of zeroes.
BRK-A has about a million shares outstanding (800K according to Yahoo!Finance). If Saudi Aramco were to offer a million shares, each share would price about .... $80 billion / 1,000,000 ......... $80,000. I wonder if Saudi Aramco will offer "A" shares and "B" shares? My numbers may be way off. After awhile I lose track of all the zeroes. If this is important to you, go to the source. Or to your broker.
$2 trillion / 265 billion bbls = $8 / bbl in reserves. Again, my numbers may be way off, or maybe I'm misreading something.
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Global Shipping Routes
Incredible visualization of global shipping routes: http://www.vox.com/2016/4/25/11503152/shipping-routes-map. If you look closely, you can see the tanker that carried North Dakota crude oil to the Netherlands this past month.
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Texas Ranch For Sale
On the way to water polo this evening, granddaughter #1 asked me if I had heard of the "Waggoner" ranch. I had not. She told me it was for sale for $725 million. I was curious. At Bloomberg:
FOR SALE: Largest ranch in the U.S. within a single fence.
Texas fixer-upper with more than 1,000 oil wells; 6,800 head of cattle; 500 quarter horses; 30,000 acres of cropland; tombstones for legendary cowboys, long-dead dogs, and a horse buried standing up.
Favorite of Will Rogers and Teddy Roosevelt. Colorful history of drinking and divorce. Fifteen-minute drive to rib-eyes at the Rusty Spur in Vernon. Ideal for Saudi oil sheiks, billionaire hedge funders, and dot-commers who can tell a cow from a steer. Profitable. Zero debt. Property taxes only $800,000 a year. Price: $725 million.That was from a year ago, 2015. From what I can tell, it still may be available.
Granddaughter #1 says that's what they talk about in school these days. I forget what we were talking about when we were in middle school, but I know it was not about billion-dollar ranches.
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RomneyCare -->ObamaCare-->HillaryCare
Had you asked me four years ago -- even two years ago -- if we would ever see a story like this in the Washington Post, I would have agreed: never see it. President Obama isn't even out the door yet and here we have the third most liberal newspaper with this critique of Michelle's husband's "legacy":
Historian David Maraniss notes, in Sunday’s Post, that President Obama came to office with the goal of changing “the trajectory of America” and leaving “a legacy as a president of consequence, the liberal counter to [Ronald] Reagan.”
On the foreign-policy front, he is the anti-Reagan for certain. Reagan defeated Soviet communism and left us a safer world; Obama presided over the rise and metastasis of the Islamic State and left us a far more dangerous one.
Domestically, Ronald Reagan told the American people: “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’ ” Obama wanted to convince Americans that they were not terrifying. And the way he was going to do it was through the only great liberal legislative achievement of his presidency: Obamacare.
He failed. Even before he leaves office, Obamacare has begun unraveling.
The law was passed over the objections of a majority of Americans, it is still opposed by a majority of Americans — and their opposition has been vindicated. Last week, UnitedHealth Group announced that, after estimated losses of more than $1 billion for 2015 and 2016 under Obamacare, the company was pulling out of most of its ill-fated exchanges.That was all from The Washington Post. I did not add a thing. Based on the comments, some folks still think the GOP is to blame for the failure of ObamaCare. Those who say that are half-right: ObamaCare has failed, but the GOP had nothing to do with it. In fact, for it to have passed, it required GOP votes, and a conservative Supreme Court to uphold the legality of the law.
The GOP needs to stay away from this. Let ObamaCare run its course.
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