Saudi Aramco Schadenfreude - Arabianbusiness:
The news and comments made about Aramco’s IPO is wholly negative. The way the IPO was, and is, being characterized is on par with the flop of WeWork’s IPO. There is a similarity in that both companies differed with the investment banks on the pricing of their shares. But there important differences, not least is that Aramco is massively profitable with huge positive cashflow.
Then there is the point that Aramco has negligible financial liabilities. For example, Aramco can fire its CEO without having to pay him $1.5 billion. Or was it $1.4 billion? But what’s a $100 million for the CEO of an American startup these days?
The pricing of Aramco is based on actual positive cash flows, with the differences between seller and advisor on pricing portrayed predominantly on the expected corporate governance of Aramco.
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