Saudi Aramco Gets Wall Street's Thumbs Down — Again

Bloomberg

a day ago

Initial public offerings are often extravagant affairs. But even by their hyperbolic standards, with bankers desperately drumming up interest, the Saudi royal family went the extra mile when it sold shares in oil giant Aramco. But it didn't work at the time – and it isn't working now.
On the eve of the 2019 IPO, one of the most senior Saudi royals warned 'those who have not subscribed' to the listing would be left 'chewing their thumb' with regret. The $2 trillion valuation the Saudis sought would materialize in 'a few months.' The message: buy now or miss out.
Wall Street didn't buy, and it hasn't missed out. Over the last five and a half years, Aramco stock has underperformed all its peers. Now, it's taking on debt to cover its dividend; its shares have fallen to a five-year low and volume is falling, a sign that local and foreign investors are shunning the stock.
On a total return basis, including re-invested dividends, Aramco has delivered a paltry 16% since its IPO; the worst among a selection of the world's largest companies, according to data compiled by Bloomberg. Even Russia's sanctioned Rosneft Oil Co. PJSC, has done better. Exxon Mobil Corp., Chevron Corp., and Shell Plc have all delivered total returns of more than 50%.