Saudi Aramco's pricing for its initial public offering gives the oil company a valuation that—at $1.7 trillion—falls short of the $2 trillion that Crown Prince Mohammed bin Salman hoped for. But selling 3 billion shares at $8.53 apiece would still bring in $25.6 billion, the Wall Street Journal reports. That would set a record: Alibaba Group Holding, a Chinese online commerce company, had a $25 billion IPO in 2014. Demand for Aramco stares is strong, with orders totaling $60 billion placed by Tuesday. That sets up the overallotment option, which would add 450 million shares to the offering and push the grand total raised to nearly $30 billion. Trading on Saudi Arabia's stock exchange is scheduled to begin Dec. 11.
Despite those figures, one analyst called the IPO a "hollow win" for the state-run company. Local demand from retail investors was a disappointment, and "the government had to manufacture demand, even from Saudis," she told CNBC. The lower valuation was an effort to attract investors, per the Journal, many of whom still find the Aramco IPO out of line compared with competitors such as Exxon Mobil and Chevron. Concerns over ongoing government control of Aramco is another factor. "While investors agree that Aramco has superior financial and franchise strength," a Bernstein report said Monday, "weak corporate governance and limited earnings growth are reasons for the discount relative to peers." For example, per the AP, oil production levels are set by the government. (Read more Aramco stories.)