By Shaji Mathew and Mourad Haroutunian - Dec 19, 2011 3:21 PM GMT+0700
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Saudi Prince Alwaleed bin Talal was ranked the richest Arab businessman this year by Arabian Business magazine with assets valued at $21.3 billion. Photographer: Yasser Al-Zayyat/AFP/Getty Images
Prince Alwaleed bin Talal, the Saudi investor with stakes in Apple Inc. (AAPL) and Citigroup Inc. (C), and his investment company agreed to buy a $300 million stake in Twitter Inc., the microblogging service with about 100 million users.
The agreement to acquire a “strategic stake” in Twitter followed “several months of negotiations,” Kingdom Holding said in a statement today. The Riyadh-based company, controlled by Alwaleed, a nephew of Saudi Arabia’s King Abdullah, jumped as much as 8.3 percent on the local exchange.
Twitter, which lets people send 140-character messages, is enhancing its service to lure more users and make the site more attractive to advertisers. Alwaleed’s investment in the San Francisco-based company comes as Facebook Inc., the world’s most-popular social networking site with more than 800 million users, is said to consider raising about $10 billion from an initial public offering.
“Kingdom realizes the importance of social networks like Twitter and their future growth prospects, and decided to benefit from this trend,” said Samer Darwiche, an analyst at Gulfmena Investments in Dubai.
Twitter said in August it had raised a new round of funding from DST Global, along with several past investors. The company aimed to raise about $800 million and was looking to use half the money to buy back shares from employees and earlier backers, people with knowledge of the plan said at the time. The investment valued the short-messaging service at $8 billion, the people said.
Ad Program
Twitter has been coping with executive turnover and a slow rollout of its ad program, which promises to be its main source of revenue. Co-founders Evan Williams and Biz Stone have lessened their involvement under Chief Executive Officer Dick Costolo, who took the reins in October 2010. Mike Abbott, a vice president in charge of engineering, also has stepped down.
The microblogging service’s revamp will feature tabs at the top of the screen that let users more easily access their home pages, connect with others and discover new content, Twitter said today at an event in San Francisco. Twitter will generate $139.5 million this year from ads, according to EMarketer Inc.
Twitter confirmed the investment in an e-mail, declining to give additional comments.
‘Savvy Investor’
Kingdom added 6.4 percent to 8.35 riyals at 11:14 a.m. in Riyadh. Before today, the stock had lost 4.3 percent this year.
Alwaleed is the biggest individual investor in Citigroup. His other investments include stakes in General Motors Co., News Corp. (NWSA) and Apple. The prince was ranked the richest Arab businessman this year by Arabian Business magazine with assets valued at $21.3 billion. Kingdom Holding, 95 percent owned by the prince, is building the tallest tower in the world in Jeddah at a cost of 4.6 billion riyals ($1.23 billion).
Alwaleed “is a savvy investor and the hot thing in the I.T. world is social networking,” said Nabil Farhat, a partner at Abu Dhabi-based Al Fajer Securities in Abu Dhabi, United Arab Emirates.
Facebook may file for an IPO before the end of the year, a person with knowledge of the matter said last month. The share sale may value the company at more than $100 billion, twice as high as it was in January, when the company announced a $1.5 billion investment from Goldman Sachs Group Inc. and other backers.
Demand for technology IPOs reignited in November after a summer lull, setting the stage for Groupon Inc., Zynga Inc., the largest maker of games for Facebook, and Angie’s List Inc. to go public.
To contact the reporters on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.net; Mourad Haroutunian in Riyadh at mharoutunian@bloomberg.net.
To contact the editors responsible for this story: Riad Hamade at rhamade@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net
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