JPMorgan Chase Reportedly Wins Saudi Aramco IPO
The financial rumour mill is circulating with excitement at the thought of JPMorgan Chase winning the Saudi Aramco initial public offering. This corporation is the world’s most profitable, and numerous wall street firms were competing against one another to win the IPO. Sources close with JPMorgan have indicated that a decision will be announced later this week. However, there is a chance that Morgan Stanley could win the initial public offering with Saudi Aramco. Currently, Morgan Stanley operates Uber’s Initial Public Offering.
The fact that Morgan Stanley has failed with their estimations on Uber’s IPO has resulted in the Saudi Arabian Corporation to be concerned with the firm’s capabilities. Uber determined the wrong valuations for the ride-sharing application in May 2019. Subsequently, this caused the shares price valuation to drop by 18% in less than a week. The IPO was projected to sell at $45.00, but at the time of this article is only costing traders $31.86.
JPMorgan Chase is the best option for Saudi Aramco. The company is head of the oil kingdom in Saudi Arabia, and the primary source of revenue for the country. Their accomplishments outweigh any other billionaire’s or corporations on a worldwide scale. The company becoming publicly traded is an indication that they fear the changes coming with Crown Prince Mohammed bin Salman’s goals to remove fossil fuels from the country. Selecting JPMorgan Chase to run the IPO can be sustainable income for Saudi Aramco, regardless if fossil fuel operations are terminated in Saudi Arabia. It’s estimated that the world’s largest corporation plans to enter green energy marks in the coming decades.
JPMorgan’s IPO History
Most analysts are shocked at the idea that JPMorgan Chase will most likely win the bidding war on Saudi Aramco’s IPO. This is primarily because historically, the firm hasn’t been known for operating initial public offerings for large corporations. JPC always fell behind Goldman Sachs and Morgan Stanley. The tides are turning though, and if JPMorgan Chase can maintain this IPO, then they’ll become known as the most significant wall street banking institution.
Jamie Dimon, the Chief Executive Officer and Board Chairman for JPMorgan, has plenty of reasons to celebrate if the firm’s bid is selected. Why? Because last year Saudi Aramco earned more than $111 Billion in profit. That’s double the average that’s collected by Apple yearly. There is a chance that this deal could be halted in its tracks due to Grand Prince Mohammed bin Salman. Last year he delayed transactions that Saudi Aramco had, which would’ve allowed the oil corporation to own Saudi’s largest chemical provider. Mohammed could ban the sale of an IPO with an American Banking Institution. Hopefully, this isn’t the case for JPMorgan.
The Plan
The Saudi Aramco IPO will be the most extensive initial offering from a corporation is history. It’s estimated that when the IPO first goes on sale in 2020, $25 Billion in stock will be available to traders of the New York Stock Exchange. Afterwards, the London Stock Exchange and the Chinese Stock Exchange will both receive $25 billion in stock that can be sold. This means that already $75 Billion of stock will be available throughout 2020 and 2021. The fast-paced IPO indicates that Saudi Aramco and JPMorgan Chase are worried that exchanges will be concerned will selling such high volumes of stock on a long term basis. This is due to projected declines in market activity in the upcoming decade. The decision on the timeframe for the initial public offering will first be released when JPMorgan Chase is officially confirmed as the seller. As for Saudi Arabia Government Officials, it’s unknown what they’ll decide towards Saudi Aramco’s upcoming IPO.