Dec 19 2011 |
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2ndUPDATE: Saudi Prince Alwaleed Buys $300M Stake in Twitter
Monday, Dec 19, 2011
--Prince Alwaleed, Kingdom Holding buy strategic stake in Twitter
--Part of strategy to invest in promising, high-growth businesses with global impact
--Says social media will fundamentally change the media industry landscape
By Ellen Knickmeyer
RIYADH (Zawya Dow Jones)--Saudi Arabia's Prince Alwaleed bin Talal Monday announced the purchase of a $300 million investment in Twitter, expanding his media empire into social-media sites and giving the billionaire a stake in an online forum that was widely used by activists in this year's Arab uprisings.
Prince Alwaleed stressed both the investment potential and growing clout of the microblogging site in announcing the purchase, which he said was part of a drive "to invest in promising, high-growth businesses with a global impact," according to an emailed statement from Kingdom Holding Co. (4280.SA), which he heads.
The unlisted Twitter was valued by analysts in October at about $8.4 billion, suggesting that Prince Alwaleed's stake is equivalent to 3.6% of the company.
Twitter, which allows users to send messages called 'tweets' of up to 140 characters each, said recently it had grown to 100 million active users who cumulatively send 250 million tweets per day. Facebook Inc., by comparison, has more than 750 million users.
"Social media will fundamentally change the media industry landscape in the coming years. Twitter will capture and monetize this positive trend," Ahmed Halawani, executive director of private equity and international investments at Kingdom Holding , said in the same statement.
Prince Alwaleed, a nephew of Saudi King Abdullah, was rated by Arabian Business magazine earlier this month as the Arab world's richest business man, with more than $21 billion in wealth in 2011.
He had been cited in news reports since October as pursuing a purchase of Twitter shares from one of the co-founders of the social media company. Kingdom Holding officials didn't provide any further details of the purchase early Monday. Matt Graves, a Twitter spokesman, confirmed the investment but declined further comment.
"I see him as an investor happy to invest in any industry that he might think is lucrative at any stage," Reda Haidar, a media and Internet analyst based in the United Arab Emirates, said by telephone.
Prince Alwaleed, who owns 95% of Kingdom Holding , has focused his investments on banks, hotels and media companies, building sizable stakes in companies such as Citigroup Inc. (C), News Corp. (NWS), Apple Inc. (AAPL) and Time Warner Inc. (TWX). News Corp. owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. He is also developing a new Arabic language satellite news channel with news service Bloomberg LP.
Kingdom Holding 's shares were 8.3% higher at 8.50 Saudi riyals ($2.26) at 1004 GMT on the Riyadh bourse after the announcement.
Twitter, a San Francisco-area firm with more than 600 employees, earlier this year said it had received "significant" funding from a group led by Digital Sky Technologies, a Russia-based venture firm that has invested in other social-networking companies. News reports at the time said Twitter was looking to raise as much as $800 million, which included a portion to compensate employees who wanted to sell shares. That would bring the total amount raised by the company to around $1 billion.
Activists and social media say Twitter played a strong role in the Arab Spring uprisings this year, helping activists unite, win followers and spread the news of their grievances and demonstrations.
-By Ellen Knickmeyer, Dow Jones Newswires, +971 55 1093359, ellen.knickmeyer@dowjones.com
(Amir Efrati in San Francisco contributed to this report.)
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
19-12-11 1006GMT
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