Six months of a very eventful takeover … and turmoil that isn’t over yet. Elon Musk bought Twitter for $ 44 billion and took control of it on Friday, October 28. The Tesla and SpaceX boss immediately dissolved the board, fired the CEO and other senior officials. Twitter will begin layoffs this Friday. According to the Washington postthe new leader plans to lay off around 50% of the approximately 7,500 employees.
Elon Musk financed the transaction with his personal fortune, contributions from investment funds and other large fortunes, as well as bank loans that the Blue Bird company will have to repay. Among the shareholders of the Twitter capital, one of them particularly attracts attention: that of Saudi prince Al-Walid Bin Talal. According to a document submitted to the American market authority, the SEC, this 67-year-old businessman has become the second largest shareholder of the social network. The entrepreneur, who initially turned down Elon Musk’s offer, deeming it too low for Twitter’s “intrinsic value”, eventually brought him the nearly 35 million shares he already owned.
In the $ 44 billion transaction that enabled the acquisition of Twitter, the approximately 35 million shares held jointly, and brought to Elon Musk, by Al-Walid Bin Talal himself and his investment firm Kingdom Holding Company (KHC ) in fact weighed almost 2 billion. As mentioned Publicationthe presence of Al-Walid Bin Talal among Twitter investors is nothing new: in 2011 this grandson of the founder of the Saudi kingdom had committed 300 million dollars on Twitter (or 229 million euros at the time) and his weight has continued to grow, allowing it to become the second largest shareholder in 2015.
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In Washington, Saudi participation in the capital of Twitter worries
Dubbed the “Warren Buffett of the Middle East” by the weather, Al-Walid Bin Talal is used for high-profile, risky bets, he recalls The echoes. A rescuer of the financial group Citicorp (the predecessor of Citigroup Inc), weighed down by bad debts in the 1990s, he saw his stake of more than 190% fly off in the following decade, the business newspaper specifies. At the time of the 2008 financial crisis, the Saudi prince raised his stake when the share price plummeted. Today, Citigroup stock is trading at less than a tenth of its pre-crisis value.
Al-Walid Bin Talal has been reorienting Kingdom Holding’s portfolio on technology and media for 20 years with the entry into Snapchat in 2018 (2.3% of the capital for 250 million dollars). He also owns 18.7% of the Rotana group, present through television, radio, cinema and music throughout the Middle East, complete The echoes.
Saudi participation in the capital of Twitter is worrying in Washington, while for the crown prince Mohammed bin Salman, known as “MBS”, the monitoring of social networks “is a security imperative for his government”, he recalls. Publication David Rigoulet-Roze, research associate at the Institute of International and Strategic Relations (Iris). According to the Washington postthe US Treasury Department contacted Twitter to inquire about the new governance of the company, and in particular about the details of sensitive information on the social network that will be accessible to major investors.
For six months, the HKC company was 17% owned by the sovereign wealth fund of Saudi Arabia, headed by the crown prince “MBS”. However, relations between Al-Walid Bin Talal and “MBS” have been complicated. This prince was one of around 300 personalities arrested and then locked up in the Ritz-Carlton hotel in Riyadh during a wave of anti-corruption crackdowns in November 2017 orchestrated by “MBS”. He was released three months later after making financial arrangements with the authorities. According to “MBS” opponents, this wave of arrests was an attempt to avert potential rivals to consolidate their power in the wealthy Gulf monarchy.
David Rigoulet-Roze notes that Al-Walid Bin Talal then “had to renounce all forms of political influence in view of the future succession of the current King Salman”. And he continues: “Mohammed bin Salman has agreed to give him some economic leeway, because he also needs Prince Al-Walid bin Talal as a guarantor with potential investors, to carry out his famous ‘Vision 2030’ plan”. From now on, Al-Walid Bin Talal is one of the earliest supporters of the modernization reforms undertaken by Mohammed bin Salman.
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