FOX Business’ Charlie Gasparino and ABG Advisory managing director Jackson Eisenpresser discuss the oil giant’s prospects.
DUBAI — Shares in Aramco jumped on their second day of trading to reach Saudi Crown Prince Mohammed bin Salman’s coveted valuation target of $2 trillion.
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In early trading Thursday, the oil giant’s share price on Saudi Arabia’s Tadawul exchange rose 8% to 38.15 riyals ($10.30), giving the oil giant a market capitalization of $2 trillion. That was up from a $1.7 trillion valuation set during the company’s initial public offering, the world’s largest ever.
The shares increased 10 percent on their market debut Wednesday, hitting an upward limit set by the exchange.
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The increase in value is partly a function of the outsize impact that the company’s tiny 1.5 percent share float has on its valuation. It took only $300 million in shares traded Wednesday to drive the value of Aramco up by nearly $200 billion. At a price of 38 riyals, Aramco’s 1.5 percent free float means shares owned by the public are worth $30 billion.
Still, Prince Mohammed and his officials can point to the milestone as proof that Aramco, known officially as Saudi Arabian Oil Co., was worth $2 trillion. The value of the company has been a sticking point for global investors for the four years since the prince announced an intention to list the firm, and was one of the main reasons the share sale stalled.
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