Saudi Prince Alwaleed’s Twitter Investment Was Made Via Secondary Market

Saudi Prince Alwaleed’s Twitter Investment Was Made Via Secondary Market
December 18, 2011 – Kerry A. Dolan – Forbes

Billionaire investor Prince Alwaleed of Saudi Arabia purchased his stake in Twitter on the secondary market and not directly from Twitter, Forbes has learned.
Billionaire Saudi Prince Alwaleed Takes $300 Million Stake In Twitter Kerry A. Dolan Kerry A. Dolan Forbes Staff
Prince Alwaleed’s Twitter Investment Isn’t For Politics Or Football Scores Chris Barth Chris Barth Forbes Staff

Ahmed Halawani, executive director for private equity and international investments for Alwaleed’s Kingdom Holding Co., explained that the investment in Twitter was made through a “special purpose vehicle” alongside other investors.

These special purpose vehicles have come into vogue as the demand for a piece of much desired social media companies like Facebook, Zynga and Twitter grew over the past year and a half. Special purpose vehicles are set up to buy shares in companies like Twitter from existing shareholders –usually early employees – who want to diversify their holdings. In this post here I explain how these investments work and some of the brokers that operate them.

Halawani declined to state the overall value of Twitter at which the investment was made. However, the New York Times is reporting that the Prince and Kingdom Holding purchased shares at a price that values Twitter at $8.4 billion. That jives with what Halawani said about the size of the Prince’s stake, which was described as “strategic” in a statement issued by Kingdom Holding early Monday. “The normal definition of a strategic stake is 3%, and you can assume [the stake purchased on behalf of the Prince and Kingdom Holding] was more than 3%,” Halawani said. At an $8.4 billion valuation, a $300 million investment equates to a 3.57% stake. …source