A wealthy Saudi Prince has bought three percent of Twitter, the latest of Arab world investments that are making inroads on Western-based companies.
Saudi Prince Alwaleed bin Talal, who heads the Kingdom Holding Company and who has been rated as the world's richest Arab, announced Monday the $300 million purchase of Twitter shares, the Dow Jones news service reported.
The prince's strategy is "to invest in promising, high-growth businesses with a global impact," according to a statement from Kingdom Holding, which quoted the prince.
The Arabian Business magazine has stated Prince Alwaleed's wealth at more than $21 billion. He bought the Twitter shares from one of the social network's co-founders.
"Social media will fundamentally change the media industry landscape in the coming years. Twitter will capture and monetize this positive trend," stated Ahmed Halawani, executive director of private equity and international investments at Kingdom Holding.
Prince Alwalee and his holding company already have a stake in other Western companies, ranging from News Corp, which owns Dow Jones and publishes The Wall Street Journal, to Citigroup, Apple, entertainment parks and ports. The investments in ports raised worries in the Bush administration over possible concerns of national security.
During the financial blowout three years ago, when stock prices dived by 50 percent, Arab investors bought out large parts of banks and companies, including one-third of Barclay's Bank of England. Previously, Qatar investments bought a nine percent stake in the Reuters News Agency.
The Abu Dhabi Investment Council in 2008 forked out approximately $800 million for a 75 percent stake in New York City's 1,046-foot-tall Chrysler Building, which was the world's tallest building for a year until the Empire State Building surpassed it in the 1930's.
The purchase of American banks by foreigners has been blocked in the past by security and political considerations, but the barriers have come down, Mohammed Ramady, a former banker and Visiting Associate Professor at the King Fahd University of Petroleum and Minerals, wrote at the time in the Financial Adviser magazine.. "How long this lasts is only a matter of guesswork, as once again, the specter of foreign takeovers of 'national' symbols will be hard to accept," he added.
Since then, the economic problems of the United States that have paralleled growing wealth in oil-rich Arab countries have made the once mighty American empire more vulnerable to foreign purchases.
"The energy, financial and political woes that grip the U.S. signal a decisive shift in world power, mocking the liberal delusion that Barack Obama or John McCain can return American prestige and power to its pre-Bush year 2000 nirvana," Australian editor-at-large Paul Kelly wrote during the 2008 financial crisis.
"There is instead a new reality: the greatest transfer of income in human history [and] the rise of a new breed of wealthy autocracies that cripple U.S. hopes of dominating the global system and demands on the U.S. to make fresh compromises in a world where power is rapidly being diversified," he wrote.
After the Arab investment in the failing Citibank conglomerate during the crisis, Abu Dhabi's' director of international affairs, Yousef al Otaiba, wrote the Treasury Department, "It is important to be absolutely clear that the Abu Dhabi government has never and will never use its investment organizations or individual investments as a foreign policy tool."