Posted by John Donovan: 21 April 2024
In a move that screams “What the hell are we even doing anymore?”, Shell, the grand poobah of the London Stock Exchange, is flirting with the idea of dumping the UK for a shot at American glory. But will this desperate shuffle truly be the panacea for their valuation nightmares? Spoiler alert: probably not.
Former Shell bigwig Ben van Beurden seems to think so, eloquently describing London’s valuation of Shell as being on par with a discount bin at a dollar store. Current head honcho Wael Sawan chimes in, echoing the sentiment with all the finesse of a bull in a china shop, claiming they’ve got “a location that clearly seems to be undervalued” and they’re ready to roll the dice on “all options. All options.”
But hold onto your hats, folks! Shell skipping town would deal a sucker punch to the London market, already reeling from a string of high-profile exits. It’s like witnessing a sinking ship try to outdo itself in a race to the bottom.
Now, let’s talk numbers. Shell’s got a price tag that would make a bargain hunter blush compared to its American pals Exxon Mobil and Chevron. But wait, there’s more! If Shell were valued like Exxon, their market cap would swell faster than a balloon at a kids’ party, according to AJ Bell’s Dan Coatsworth.
But here’s the kicker: a US listing won’t magically fix all of Shell’s problems. Shocking, right? Unlike a mom-and-pop plumbing business, Shell’s not exactly struggling to catch the eye of American investors. In fact, most of their shareholders are already sucking down burgers and fries across the pond.
And let’s not forget the elephant in the room – or should we say, the oil spill in the ocean? Shell’s lower price tag isn’t some mystical curse cast by London’s financial wizards; it’s a reflection of investor skepticism towards the whole “green” thing. Meanwhile, Exxon and Chevron are sitting pretty because they’ve got their hands elbow-deep in crude, unlike Shell, which is attempting a feeble tap dance towards renewables.
So, while Shell might be dreaming of palm trees and Hollywood stars with a US listing, the reality check is this: fleeing to the land of opportunity won’t magically solve their problems. But hey, at least they’ll have a better shot at dodging those pesky green initiatives, right?
