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Why the arrest of a Saudi prince worries Twitter


Prince Al-Walid, arrested this weekend on the order of a Saudi anti-corruption commission, is one of Twitter’s biggest investors.

The arrest of several princes, former members of the government and Saudi ministers shakes the business world. The Saudi authorities carried out a spectacular anti-corruption crackdown on Saturday (November 4th). Among those arrested would be the wealthy Prince Al-Walid bin Talal. The businessman, one of the top 50 fortunes in the world, is one of the most publicized Saudi figures in the West.

The billionaire has invested in big names in new technologies, including Apple, the Lyft transport company or Twitter. On 23 October, in an interview with CNBC, Prince Al-Walid confirmed that he still held shares in the California company, showing optimism about his investment. “It does not promise to be easy because they face some difficulties, but our initial investment was very reasonable, and we are moving towards a break-even point,” he said about the company.

The volume of shares currently held by the businessman remains opaque, due to the confidentiality policy of Kingdom Holding Company, his investment company. In December, the prince held 4.9% stake in the company, according to InsiderScore.com, making him the fifth largest investor in the company, according to Ben Silverman, research director of InsiderScore, mentioned by CNBC. By the end of 2015, al-Walid bin Talal had announced that he had become Twitter’s second largest shareholder after increasing his stake. With a 5% share, he had replaced the current CEO of the group, Jack Dorsey, which holds only 3.23%.

The fear of falling on the stock market
The impact of the ad seems to be still moderate on the company. Twitter’s share price fell by 1.35% in the late afternoon on the New York Stock Exchange. The Citigroup share price, of which Kingdom Holding Company also holds shares, fell by 1%.

The announcement of the alleged arrest of Al-Walid has, however, had direct consequences on his investment company. The billionaire is the largest shareholder, 95%, Kingdom Holding, an investment company that holds stakes in a number of companies, including Accor. This morning, the action of the hotel group posted a loss of 1.48% (to 42.07 euros) on the Paris Bourse, one of the largest decreases in the CAC 40 index, before returning to its level original. Kingdom Holding’s share price fell 9.9% at the opening of the Saudi stock market Sunday, the day after the presumed arrest of the prince. The rules of the Saudi stock exchange cap the decline of shares to 10% in one session. The Tadawul All-Shares Index (Tasi), the largest stock market in the Arab world, also fell by 1.6%, just one minute after it opened.

Saudi Arabia must now examine the international investments of those arrested to assess their impact. The shareholders of the companies concerned are waiting for the real consequences of this presumed arrest on the value of the shares of Prince Al-Walid, who could part with some of his investments.

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