Tuesday, December 20, 2011

Saudi prince buys $300m stake in Twitter

A member of Saudi Arabia’s ruling royal family has become a significant shareholder in Twitter, one of the online tools used by protesters who staged the “Arab Spring” uprisings this year.

Prince Alwaleed bin Talal, the Saudi billionaire, has acquired a $300m stake in the US microblogging service after buying shares from existing shareholders in a secondary offer, according to one person familiar with the arrangement. The deal will leave him in control of a stake of about 3 per cent in the site, based on the value of other recent private transactions.

The Saudi investment – a joint arrangement between the prince and the Kingdom Holding Company that he controls – came after months of talks and was a “strategic stake”, Kingdom Holding said.
Prince Alwaleed – a high-profile investor in technology and media shares including News Corp and Apple – said the deal showed his enthusiasm for “promising, high-growth businesses with a global impact”.

Twitter confirmed the investment but refused to comment on the implications of having a member of the Saudi ruling family among its shareholders.

The prince, a nephew of the Saudi King Abdullah, has a reputation as a liberal by the standards of the region. He is launching an Arabic news channel that he has said will focus on freedom of speech and the changes taking place across the Middle East.

Prince Alwaleed has long stood out from other Saudi princes, both in his social views and his investment philosophy. In the conservative kingdom, where showing a woman’s face in a newspaper still causes a stir, he ignores such restrictions, receiving dignitaries accompanied by his unveiled wife, Princess Ameera, and instructs papers to publish their pictures.

Twitter and Facebook have at times been used by activists inside Saudi Arabia to support campaigns there. A Saudi law that came into effect in February – just after the start of the Arab awakening – expanded state control so that online news and commentary websites could be fined or blocked if deemed to be offensive, compromising the nation’s economy or security, or violating Islamic sharia law. Some activists have also been detained over their posts on the web.

The Alwaleed stake marks the second prominent international investment that Twitter has taken this year from a region where its service has played a prominent role in political protests. DST, the Russian internet investment firm, paid $400m for 5 per cent of the company this year, half of it by buying shares from existing shareholders. Twitter was among the online tools used in political protests in Russia earlier this month.

The investment marks the latest in a series of high-profile gambles in tech companies taken by Prince Alwaleed, who first won international attention with an investment in then-struggling Citigroup in the early 1990s.

He made a big gain, at least on paper, after buying into browser maker Nestcape in the dotcom boom, but later traded that for stock in Time Warner before that company’s share price collapse. However, the 5 per cent stake he took in Apple on Steve Jobs’ return in 1997, at the time worth some $25m, is now worth more than $17bn.

No comments: