Saudi Prince Alwaleed buys Twitter stake
Sitaraman Shankar
Reuters US Online Report Technology News
Dec 19, 2011 18:15 EST
DUBAI (Reuters) – Prince Alwaleed bin Talal, the Saudi billionaire and an investor in some of the world’s top companies, has bought a stake in microblogging site Twitter for $300 million, gaining another foothold in the global media industry.
Alwaleed, a nephew of Saudi Arabia’s king who was estimated by Forbes magazine this year to have a fortune of over $19 billion, already owns a 7 percent stake in News Corp and plans to start a cable news channel.
Twitter was a key means of communication for protesters in the Arab Spring revolts this year, violence that threatened Saudi Arabia until the kingdom unveiled a populist $130 billion social spending package.
The Twitter stake, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, resulted from “months of negotiations,” Kingdom said.
The investment was a secondary market transaction, meaning that Alwaleed and Kingdom Holding bought the Twitter shares from existing shareholders, rather than making a direct investment, according to a person familiar with the matter. The financing took place at around the same time as a $400 million venture-capital investment in Twitter that closed in September, but was part of a separately arranged transaction, another person familiar with the matter said.
Twitter chief executive Dick Costolo acknowledged the company was valued at $8 billion in the secondary markets in October, according to media reports, which would peg the size of Alwaleed’s investment at just under 4 percent.
Kingdom’s executive director Ahmed Halawani told Reuters that “substantial capital gain” was the motivation behind the investment, adding that there were no moves to ask for a board seat or influence strategy at Twitter.
Twitter, which allows people to send 140-character messages, or Tweets, to groups of followers, is one of the Internet’s most popular social networking services, along with Facebook and Zynga Inc.
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