Saudi Aramco shareholders had yet another bullish trading day on Friday when the company’s shares closed off with a 4.55% gain. The Saudi government-owned oil firm on Thursday hit the $2-trillion mark after gaining about $300 billion in market value, adding to its already $1.7-trillion valuation.
The oil producer goes down in history as the first company to hit the two trillion-dollar mark in valuation, with distance rivals Apple and Amazon barely hanging on to the one-trillion bar.
Aramco’s stock gained 10% on two consecutive days before jumping 4.55% on Friday.
Aramco, now the most valuable company, recorded a lot of buys from its home country, Saudi Arabia. According to a Tuesday statement by Samba Capital, one of the oil producer’s underwriters, about 97% of the subscriptions came from Saudi Arabia, with only 3% being foreign investors.
Saudi prince’s initial $2-trillion valuation had been thwarted by critics, but it seems he will now have a field day seeing as hardly a week later, he has achieved his widely-protested valuation.
Bernstein Research analysts last week were quick to note that it was “too much, too soon” for the market to place a $2-trillion valuation tag on the oil company, with earnings growth expected to stall coupled minimal crude oil price gains.
“Aramco should trade at a discount rather than premium to international oil majors. The kingdom still owns more than 98% of the company, they noted, suggesting that investors should be concerned about corporate governance. Bernstein reckons the company is worth as little as $1.4 trillion,” Bernstein Research experts said.
“Aramco could trade in a league of its own for some time, but the stock market is a weighing machine in the long term, and the laws of economic gravity will eventually apply,” they added, recommending selling Aramco shares.