Solar Energy Will Be the Biggest Winner of the Aramco IPO

Posted On March 27, 2018 2:15 pm

Aramco, the world’s most profitable oil company, has Wall Street drooling over its potential $2 trillion valuation when it finally goes public.

But what most investors don’t know is that Saudi Arabia plans to use that $2 trillion to fund developments in solar energy.

And you can profit well before the IPO.

Here’s what the Saudi government is really doing with the Aramco IPO, and how you can catch part of that windfall by investing in solar energy.

Saudi Arabia’s $2 Trillion Investment Plan

Mohammad bin Salman (MbS), the Saudi crown prince, shocked the world when he first announced that the government was weighing an IPO of the world’s biggest oil company.

But in reality, Saudi Arabia can’t live off of its massive oil wealth forever.

The Saudi government gets 87% of its revenue from the petroleum sector, primarily through the state-owned oil company. Aramco has unfettered access to Saudi Arabia’s 265 billion barrel reserves of oil, the second largest in the world.

But that oil will eventually run out, and the kingdom knows it.

Plus, upstart competitors, like shale oil drillers in the United States, are undercutting Saudi Arabia’s traditional oil supremacy.

Between 2014 and 2016, oil prices plunged from over $100 a barrel to under $30 a barrel, thanks in part to the explosion of America’s shale oil patches.

Simply put, MbS has seen the writing on the wall. And as a young reformer, he’s taking the initiative to retool Saudi Arabia’s economy for a new age.

That explains his decision to sell off a 5% chunk of Aramco in what could be the world’s biggest public offering ever.

But that’s just the beginning of his plan.

 Related: Watch Out for This Common Investing Trap

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