After several months of negotiations, Saudi Prince Alwaleed bin Talal has purchased a “strategic stake” in Twitter to the cool sum of $300 million. Kingdom Holdings Company, the international investment company helmed by Prince Alwaleed, made the investment public earlier today through a press release on their website.
Prince Alwaleed commented: “Our investment in Twitter reaffirms our ability in identifying suitable opportunities to invest in promising, high-growth businesses with a global impact.”
The investment puts Twitter among some heady contemporaries as KHC already owns stakes in several other companies you may have heard of like Apple, Time Warner, Citigroup, Pepsi, General Motors, Walt Disney and News Corporation. You’ll notice lots of media companies in that portfolio and Twitter is the first social media company to be included in Prince Alwaleed’s collection. At least one speculation sees this latest investment as a possible act of self-preservation:
One could speculate that the Twitter investment is related to the wave of revolutions that have swept the Middle East in 2011. Prince Al-waleed bin Talal is not an immediate successor to King Abdullah’s throne, but a revolution would certainly not be in his best interests.
Regardless, I believe the Prince wants to have a seat at the table when it comes to the world’s most powerful and influential media organizations. The Prince understands the influence of media and can see that Twitter is the future of media.
Then again, when you’re one of the richest people in the world, these are the kinds of hobbies you get to keep. At any rate, this can’t be anything but good for Twitter’s reputation. Nothing says confidence about a company’s future like a few hundred million dollars being thrown into their pot.
UPDATE: Fortune got a scoop on further information regarding Prince Alwaleed shoveling millions of dollars into Twitter’s pockets, saying it’s not a “traditional investment”:
Fortune has learned that the deal is structured as a secondary, which means that Alwaleed purchased shares from existing Twitter insiders. The company would have been required to approve of the transaction, but will not actually receive any of the $300 million, as it would in a more traditional investment.
Earlier this year, Twitter completed an $800 million funding round that included a $400 million direct investment and a $400 million secondary component. It is unclear if Prince Alwaleed’s investment is part of that transaction (although my guess is that it isn’t).
I’m no economist, but that sounds like Twitter’s not making so much money after all on this investment. I could be (and probably) am wrong. We’ll see.
