12 ms·

Aramco listing plan halted, oil giant disbands advisors – sources

135 points by chollida1 8y ago

whatok 8y ago
This was all but announced over the past few months. Like mentioned in article in the article, they're targeting SABIC which probably requires a big bond deal. Bloomberg says current market cap is 98bn USD so... There are definitely some junior bankers who want to kill themselves over this.
- shawn 8y ago
  There are definitely some junior bankers who want to kill themselves over this. That feeling is a good one, though. (Obviously not if you follow it, but still.) I lost my dad's nest egg in bitcoin. Or rather I have 7 BTC locked up in Gox which I may or may not see <20% of again. When the realization of what I'd done hit me in 2013, it was extremely hard for me to come to terms with it. All I could think about was how much work he'd put into a house next door to us that we owned. We weren't well-off, but at one point we owned the house we lived next to, and my dad always made sure to find reliable tenants and such. Then eventually the city came knocking and said they wanted to buy part of the land so that they could widen a road. And that's where the nestegg came from, and went straight into an investment account where it doubled over the next 4 years. On the one hand, that was my opportunity to become set for the rest of my life: My friend had been telling me about bitcoin since 2010, and it was easy to roll my eyes at him back then. But of course, being young and having no training in speculation whatsoever, I bought in at the worst time and at the worst exchange. Ok, so what's my point? Well, the mindset of those junior bankers is what permeates America. We're all temporarily embarrassed millionaires, right? It's a kind of shared madness. It also causes immense harm to those who lose out. And it's cultural. In some ways it's exactly the same ill effects as certain aspects of rap culture. (I like rap, don't read into this too much.) You get told by your peers that you either have money or you don't, and if you don't then you're worthless. And so you spend all your waking energy trying to scheme how to turn $2 into $200. We're all going to die, and relatively soon. It's just so dumb to spend so much time on something that truly does not matter. My Bitcoin friend from 2010 wound up a millionaire, but he lost his love along the way, and as far as I know he still hasn't found anyone. Was that rich life worth it? People in life are what matters. Money matters too, of course, and it's tempting to dream about having FU riches. But when we live in this culture where we're all trying to gamble, and institutions are trying to gamble, and the losers get quietly swept under the rug and silenced, all that's left is the impression that everyone is winning except you. And it's ~impossible to come to your senses when you're caught up in that. It's just so dangerous and greedy. Admittedly there's not much to be done about it, but at least it can be recognized for what it is.
  - whatok 8y ago
    what
  - crunchlibrarian 8y ago
    Investment bankers working to take companies public or in M&A are not even in the same ballpark as someone who got taken in one of the many cryptocoin scams that everyone has been screaming about being scams for ten years. There is no comparison. The takeaway is not about love and life lessons, it's about listening to people who are smarter than you when they scream that something is a pyramid scheme.
    - shawn 8y ago
      The point is, it's the same mindset. The level of craziness varies wildly, but the underlying goal of "I want to seek out exponential growth" is the same. And it's worth recognizing that.
      - deleted 8y ago
        [deleted]
      - JumpCrisscross 8y ago
        > it's the same mindset It's really not. Senior bankers carefully weigh downside risks. Those risks are hedged by retainers (i.e. up-front, non-refundable advisory fees), cross-sales (e.g. management fees from a client's assets in the fund business making up for false starts at equity capital markets) and diversification (e.g. "ARAMCO is a juicy whale, but I'll keep a quarter of my staff working on other prospects"). Junior bankers get less deal diversification, but having worked on a deal of this calibre is nothing to sneeze at. The qualified will have distinguished themselves and earned front seats on future deals. Furthermore, both senior and junior bankers have salaries, benefits and stock in their company. At quite a few of those firms, buying cryptocurrencies in any meaningful quantity would be reason to question a junior's judgement.
  - newmoney420 8y ago
    > People in life are what matters. Money matters too, of course, and it's tempting to dream about having FU riches. But when we live in this culture where we're all trying to gamble, and institutions are trying to gamble, and the losers get quietly swept under the rug and silenced, all that's left is the impression that everyone is winning except you. And it's ~impossible to come to your senses when you're caught up in that. It's just so dangerous and greedy. I recently became a multi-millionaire (not from crypto) and this is so true. I'm less happy than I was when I rented month to month, didn't own a couch and ate ramen most nights. I actually really miss it- too many obligations and responsibilities to go back now. I wish I enjoyed my 20s more. I thought that I wanted money above all else. Then I got the money and realized I don't really need that. I'm only close to 1 other human in the whole world and sometimes I wonder if she even cares for me anymore since all I do is work to make more money. I was just so wrong about my whole life. Even though I'm young, I feel as though I'm entrenched in this game now with no viable way out.
captain_perl 8y ago
I think they were asking $2 Trillion, and deals with developing countries always involve a "no-layoffs clause", which is mostly nepotism. See Air India's "proposed sale" for an example. Additionally, the recent royal family instability and waiting until solar and wind took off (ie. competition) didn't help. It would be cheaper to just hire Xe and take over the country, which you would need to do anyway to enforce your ownership stake.
- valuearb 8y ago
  Only fools would have ever bought into the Aramco IPO. The vast majority of IPOs are sucker bets for investors, companies selling high to take advantage of their likely peak value. But in Aramcos case you’d have actual self dealing despots controlling your investment, and eventually they’d make clear how junior their junior partners really were.
ttul 8y ago
I am not surprised by this news. No doubt the transparency that a listing would require was simply too much for the Kingdom.
- JamesBarney 8y ago
  I think of the biggest issues was they expected to get a far higher market cap then they got.
hyencomper 8y ago
It is rumored that the Saudis made the 100 billion they wanted from the Ritz-Carlton crackdown, so no more interest in the IPO.
- justboxing 8y ago
  > the Ritz-Carlton crackdown What's this? Are you referring to the use of these hotels as luxury prisons during the purge?
  - williamscales 8y ago
    Numerous princes were detained at the Ritz-Carlton hotel and weren't allowed to leave until they admitted to corruption and surrendered significant amounts of cash. A few fought this but most folks just handed over the money. https://www.bloomberg.com/news/articles/2018-01-25/saudi-arabia-struck-gold-with-corruption-crackdown https://www.bloomberg.com/news/articles/2018-01-25/saudi-ara...
    - rz2k 8y ago
      It wasn't only confinement. One general appears to have been tortured to death, and many others had to be hospitalized and showed signs of torture. https://www.hrw.org/news/2018/03/14/saudi-arabia-allegations-abuse-death-custody https://www.hrw.org/news/2018/03/14/saudi-arabia-allegations...
      - justboxing 8y ago
        Wow. How in hell did they (Saudi Arabia) manage to become the Head of the UN Human Rights Panel ? https://www.independent.co.uk/news/world/anger-after-saudi-arabia-chosen-to-head-key-un-human-rights-panel-10509716.html https://www.independent.co.uk/news/world/anger-after-saudi-a... Reeks of corruption at the highest level.
        akira2501 8y ago
        I assume it's something along the lines of: "Never refuse a US Military request, be mad at Iran, and don't bother Israel."
deleted 8y ago
[deleted]
jonbaer 8y ago
They are denying it ... https://www.cnbc.com/2018/08/23/saudi-aramco-ipo-riyadh-denies-its-scrapping-plans-for-listing.html https://www.cnbc.com/2018/08/23/saudi-aramco-ipo-riyadh-deni...
- pseingatl 8y ago
  "The Government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum." Not much of a denial.
ataturk 8y ago
I'm speaking out of turn, but this whole thing going public seems like a "leave public investors as bagholders" kind of play more than anything else. The wealth has all been extracted, now go public and squeeze the last billions out before everyone finds out how little oil is left.

135 points by chollida1 8y ago

This was all but announced over the past few months. Like mentioned in article in the article, they're targeting SABIC which probably requires a big bond deal. Bloomberg says current market cap is 98bn USD so... There are definitely some junior bankers who want to kill themselves over this.

shawn 8y ago
There are definitely some junior bankers who want to kill themselves over this. That feeling is a good one, though. (Obviously not if you follow it, but still.) I lost my dad's nest egg in bitcoin. Or rather I have 7 BTC locked up in Gox which I may or may not see <20% of again. When the realization of what I'd done hit me in 2013, it was extremely hard for me to come to terms with it. All I could think about was how much work he'd put into a house next door to us that we owned. We weren't well-off, but at one point we owned the house we lived next to, and my dad always made sure to find reliable tenants and such. Then eventually the city came knocking and said they wanted to buy part of the land so that they could widen a road. And that's where the nestegg came from, and went straight into an investment account where it doubled over the next 4 years. On the one hand, that was my opportunity to become set for the rest of my life: My friend had been telling me about bitcoin since 2010, and it was easy to roll my eyes at him back then. But of course, being young and having no training in speculation whatsoever, I bought in at the worst time and at the worst exchange. Ok, so what's my point? Well, the mindset of those junior bankers is what permeates America. We're all temporarily embarrassed millionaires, right? It's a kind of shared madness. It also causes immense harm to those who lose out. And it's cultural. In some ways it's exactly the same ill effects as certain aspects of rap culture. (I like rap, don't read into this too much.) You get told by your peers that you either have money or you don't, and if you don't then you're worthless. And so you spend all your waking energy trying to scheme how to turn $2 into $200. We're all going to die, and relatively soon. It's just so dumb to spend so much time on something that truly does not matter. My Bitcoin friend from 2010 wound up a millionaire, but he lost his love along the way, and as far as I know he still hasn't found anyone. Was that rich life worth it? People in life are what matters. Money matters too, of course, and it's tempting to dream about having FU riches. But when we live in this culture where we're all trying to gamble, and institutions are trying to gamble, and the losers get quietly swept under the rug and silenced, all that's left is the impression that everyone is winning except you. And it's ~impossible to come to your senses when you're caught up in that. It's just so dangerous and greedy. Admittedly there's not much to be done about it, but at least it can be recognized for what it is.
- whatok 8y ago
  what
- crunchlibrarian 8y ago
  Investment bankers working to take companies public or in M&A are not even in the same ballpark as someone who got taken in one of the many cryptocoin scams that everyone has been screaming about being scams for ten years. There is no comparison. The takeaway is not about love and life lessons, it's about listening to people who are smarter than you when they scream that something is a pyramid scheme.
  - shawn 8y ago
    The point is, it's the same mindset. The level of craziness varies wildly, but the underlying goal of "I want to seek out exponential growth" is the same. And it's worth recognizing that.
    - deleted 8y ago
      [deleted]
    - JumpCrisscross 8y ago
      > it's the same mindset It's really not. Senior bankers carefully weigh downside risks. Those risks are hedged by retainers (i.e. up-front, non-refundable advisory fees), cross-sales (e.g. management fees from a client's assets in the fund business making up for false starts at equity capital markets) and diversification (e.g. "ARAMCO is a juicy whale, but I'll keep a quarter of my staff working on other prospects"). Junior bankers get less deal diversification, but having worked on a deal of this calibre is nothing to sneeze at. The qualified will have distinguished themselves and earned front seats on future deals. Furthermore, both senior and junior bankers have salaries, benefits and stock in their company. At quite a few of those firms, buying cryptocurrencies in any meaningful quantity would be reason to question a junior's judgement.
- newmoney420 8y ago
  > People in life are what matters. Money matters too, of course, and it's tempting to dream about having FU riches. But when we live in this culture where we're all trying to gamble, and institutions are trying to gamble, and the losers get quietly swept under the rug and silenced, all that's left is the impression that everyone is winning except you. And it's ~impossible to come to your senses when you're caught up in that. It's just so dangerous and greedy. I recently became a multi-millionaire (not from crypto) and this is so true. I'm less happy than I was when I rented month to month, didn't own a couch and ate ramen most nights. I actually really miss it- too many obligations and responsibilities to go back now. I wish I enjoyed my 20s more. I thought that I wanted money above all else. Then I got the money and realized I don't really need that. I'm only close to 1 other human in the whole world and sometimes I wonder if she even cares for me anymore since all I do is work to make more money. I was just so wrong about my whole life. Even though I'm young, I feel as though I'm entrenched in this game now with no viable way out.

captain_perl 8y ago

I think they were asking $2 Trillion, and deals with developing countries always involve a "no-layoffs clause", which is mostly nepotism. See Air India's "proposed sale" for an example. Additionally, the recent royal family instability and waiting until solar and wind took off (ie. competition) didn't help. It would be cheaper to just hire Xe and take over the country, which you would need to do anyway to enforce your ownership stake.

valuearb 8y ago
Only fools would have ever bought into the Aramco IPO. The vast majority of IPOs are sucker bets for investors, companies selling high to take advantage of their likely peak value. But in Aramcos case you’d have actual self dealing despots controlling your investment, and eventually they’d make clear how junior their junior partners really were.

ttul 8y ago

I am not surprised by this news. No doubt the transparency that a listing would require was simply too much for the Kingdom.

JamesBarney 8y ago
I think of the biggest issues was they expected to get a far higher market cap then they got.

hyencomper 8y ago

It is rumored that the Saudis made the 100 billion they wanted from the Ritz-Carlton crackdown, so no more interest in the IPO.

justboxing 8y ago
> the Ritz-Carlton crackdown What's this? Are you referring to the use of these hotels as luxury prisons during the purge?
- williamscales 8y ago
  Numerous princes were detained at the Ritz-Carlton hotel and weren't allowed to leave until they admitted to corruption and surrendered significant amounts of cash. A few fought this but most folks just handed over the money. https://www.bloomberg.com/news/articles/2018-01-25/saudi-arabia-struck-gold-with-corruption-crackdown https://www.bloomberg.com/news/articles/2018-01-25/saudi-ara...
  - rz2k 8y ago
    It wasn't only confinement. One general appears to have been tortured to death, and many others had to be hospitalized and showed signs of torture. https://www.hrw.org/news/2018/03/14/saudi-arabia-allegations-abuse-death-custody https://www.hrw.org/news/2018/03/14/saudi-arabia-allegations...
    - justboxing 8y ago
      Wow. How in hell did they (Saudi Arabia) manage to become the Head of the UN Human Rights Panel ? https://www.independent.co.uk/news/world/anger-after-saudi-arabia-chosen-to-head-key-un-human-rights-panel-10509716.html https://www.independent.co.uk/news/world/anger-after-saudi-a... Reeks of corruption at the highest level.
      - akira2501 8y ago
        I assume it's something along the lines of: "Never refuse a US Military request, be mad at Iran, and don't bother Israel."

deleted 8y ago

[deleted]

jonbaer 8y ago

They are denying it ... https://www.cnbc.com/2018/08/23/saudi-aramco-ipo-riyadh-denies-its-scrapping-plans-for-listing.html https://www.cnbc.com/2018/08/23/saudi-aramco-ipo-riyadh-deni...

pseingatl 8y ago
"The Government remains committed to the IPO of Saudi Aramco at a time of its own choosing when conditions are optimum." Not much of a denial.

ataturk 8y ago

I'm speaking out of turn, but this whole thing going public seems like a "leave public investors as bagholders" kind of play more than anything else. The wealth has all been extracted, now go public and squeeze the last billions out before everyone finds out how little oil is left.