Shares of newly-listed Saudi Arabian Oil Co., or Saudi Aramco, have suffered on fears of all-out war between the United States and Iran, but there are unique features that should prevent an outright selloff. That’s according to IPO Edge Editor-in-Chief John Jannarone, who spoke to Cheddar TV in an interview available here. Jannarone explained that the float of shares in the world’s most valuable public company is very small and held by Middle Eastern investors who are extremely unlikely to abandon their positions. What’s more, Aramco trades at a dividend yield comparable to the likes of Exxon Mobil Corporation, Royal Dutch Shell PLC, and Chevron Corporation, with a guarantee that dividends will be paid to public investors ahead of others. However, Aramco ultimately has very little corporate governance and is subject to the whim of Crown Prince Mohammed Bin Salman Al Saud, who effectively controls the company without any checks.
Jannarone also weighed in on the fight for plant-based market share between Beyond Meat, Inc. and Impossible Foods. He pointed out that Beyond Meat’s shares trade at a multiple of under 10 times 2020 sales, according to Sentieo, potentially less than Impossible Foods could command in the private market. Given public investors’ lack of appetite for loss-making companies, there’s a good chance Impossible Foods will remain private for some time.
John Jannarone, Editor-in-Chief