Last month, billionaire investor Prince Alwaleed Bin Talal and his company Kingdom Holding announced a $300 million investment in the social networking giant Twitter, which played a key role in spreading the pro-democracy message across the Arab world.
The deal gave him just under 4 per cent in Twitter – based on an $8bn valuation of the loss-making company earlier this year – and was hailed by analysts as a shrewd investment in a company that many believe will transform social media.
Kingdom Holding will not have voting rights or be represented on the Twitter board, the executive told Al Arabiya.
According to Forbes, Prince Alwaleed is the 26th-richest person in the world with a reported net worth of $19.6 billion. He is the owner of Rotana, one of the biggest broadcasters in the region, which runs Rotana Cinema, the second most lucrative channel by advertising revenues.
While Kingdom Holding is probably best known for its media investments the company holds 7 percent of News Corp’s class B shares, along with a number of media properties in the Arab world Prince Alwaleed is also familiar with the tech scene. He has been a high-profile owner of Apple stock since 1997, when he bought a 5 percent stake in the company for $115 million.
The Prince said in a statement that it was part of his strategy “to invest in promising, high-growth businesses with a global impact”.
“Our investment in Twitter reaffirms our ability in identifying suitable opportunities to invest in promising, high-growth businesses with a global impact,” Alwaleed explained.
The prince’s wife, Princess Ameerah al-Taweel, is a regular Twitter user and has more than 83,000 followers on the site.
A spokeswoman for Twitter confirmed that the investment had taken place but did not provide any detailed comment on whether Alwaleed or KHC has gained a seat on the board that could lead to influence over the business or any of its future output.
However, Ahmed Halawani, executive director of private equity and international investments at KHC, said that while Twitter will “fundamentally change” the media landscape, the investment was strategic, not political.
“Twitter will capture and monetise this positive trend,” he said. according to some analysts, Alwaleed’s investment could value Twitter at $10bn.
Twitter is being reckoned as the next big thing. It has gradually but significantly increased its importance in the past year. It turned out to be the key driving force of the Arab Spring, helping campaigners disseminate information and organise protests.
According to French research firm Semiocast, while Arabic accounts for just 1.2% of all public tweets, the volume of messages has grown by a factor of 22 over the year due in large part to the Arab Spring uprisings.
The micro-blogging site has more than 100 million active users.
This investment is seen as significant for Prince Alwaleed as Twitter stocks are not publicly traded and consequently difficult to acquire. It could also be seen as crucial for the social networking site, as it anticipates an increase in the number of users from the Arab world.
Karim Sabbagh, a senior partner at the consultancy Booz & Company, said that the investment in Twitter marked a “good complement” to Prince Alwaleed’s portfolio.
“They had already made a significant push over the last three years to digital media. His investment in Twitter is a step in this direction,” Sabbagh said. “This is another way to reach out to his audience across multiple channels. It puts him in a very nice position.”