The blogosphere and tech press is all atwitter about the news that Saudi Prince Alwaleed Bin Talal invested $300 million in Twitter. While the identity of the Saudi prince as an investor was not officially confirmed before, the investment itself is not new. The investment was part of the previously announced $800 million financing Twitter closed last September, according to a source with direct knowledge of the deal.
Fortune’s Dan Primack reports that the Saudi shares were a purchase of secondary shares. Indeed, half of that $800 million didn’t even go to Twitter. They were secondary shares purchased directly from employees and other existing investors. It appears that the Saudi prince took three quarters of the $400 million tranche set aside for secondary sales.
Twitter still had to approve these secondary sales, which provided a necessary release valve for employees with vested options. You could even argue that Twitter should allow employees to sell even more shares, given that some of them are leaving in order to do just that.
Created in 2006, Twitter is a global real-time communications platform with 400 million monthly visitors to twitter.com, more than 200 million monthly active users around the world. We see a billion tweets every 2.5 days on every conceivable topic. World leaders, major athletes, star performers, news organizations and entertainment outlets are among the millions of active Twitter accounts through which users can truly get the pulse of the planet.