Why did the Saudi Prince Buy Twitter Shares for $300 M?
Saudi billionaire Prince Alwaleed bin Talal has reportedly snatched up Twitter shares on Monday amounting to $300 million.
According to Reuters, the Saudi royalty's new investment in the popular micro-blogging site adds up to his increasing stakes on international media firms, which include considerable holdings on media empire News Corp owned by Rupert Murdoch.
Estimates by market analysts pegged the shares bought by Alwaleed at four percent, which according to a statement issued by Kingdom Holding Co, Alwaleed's investment firm, were acquired from Twitter's existing investors.
Reuters reported that Kingdom' Holding executive director Ahmed Halawani revealed that the deal was finalised after series of negotiations that commenced months ago.
The new Twitter investment, Halawani said, is mostly focused on realising future capital gains and at moment, the Saudi billionaire, has no plans of seeking management role or board seats in the company.
Analysts view the move as representative of the Saudi royalties' emerging awareness about social media functions and their powerful influence on socio-political and economic events.
According to Bernhard Warner of Social Media Influence, as one of the leading royal Saudi figures, Alwaleed has recognised by this time that Twitter, like Facebook and Zynga, "is going to be a really powerful broadcast channel."
Saudi Arabia was earlier threatened this year by the Arab Spring that ousted many regimes in the Middle Eastern and North African regions, with unrests on the kingdom's streets only melting away when the monarchy announced social reform packages worth $130 billion.
"The Arab world, of course, knows full well the value of Twitter. In the past year, it has been a force in politics, in regime change, so there is not a single person in that region in a position of influence who is not following the increasing power of Twitter," Warner added.
However, Abdel-Khaleq Abdullah, a known political analyst in the region, has maintained that Alwaleed's new investment is nothing but a move by an investor to capitalise on a presented opportunity.
"He just saw an opportunity, a money-making opportunity, nothing more, nothing less," Abdullah was quoted by Reuters as saying.
Estimated to hold a net worth of some $19 billion by Forbes Magazine, Alwaleed is investing on his second media venture that according to Twitter chief executive Dick Costolo earlier in October is now worth $8 billion.