Dubai, United Arab Emirates:
The Saudi Prince Walid bin Talal and his investment company, Kingdom Holding, said Monday they had bought a "strategic stake" in the social media site Twitter for $300 million.
The investment represents roughly 3 per cent stake of the company, based in San Francisco, which was valued at $8 billion in August.
In a statement, Prince Walid, who owns 95 per cent of Kingdom Holding, said the purchase was part of a strategy "to invest in promising, high-growth businesses with a global impact."
Despite ongoing volatility in the financial markets, investors have shown continued interest in Internet companies. Last week, the social network gaming company Zynga raised $1 billion in an initial public offering, while Groupon, the daily deals site, raised $700 million from the markets in early November.
Kingdom Holding stock was up about 6 percent in midday trading in Riyadh.
Prince Walid, who also own stakes in US blue chip companies such as Citigroup, General Motors and Apple, is the nephew of Saudi Arabia's King Abdullah. He also is one the of the Arab world's richest men, with assets worth an estimated $21 billion, according to Arabian Business magazine.
The investment in Twitter comes after the company's co-founder Biz Stone announced in June that he would be stepping back from the fast-growing social media. Twitter's other co-founder, Evan Williams, was replaced by the current chief executive Dick Costolo last year.
Despite the management shake-up, Twitter has continued to gain traction, particularly in the Arab world, where it was credited with playing a role in the recent popular uprisings across North Africa and the Gulf.
Arabic is now the fastest growing language used on Twitter, according to the data intelligence company Semiocast.
The volume of Arabic messages, for example, has multiplied by 2,146 per cent in the 12 months ending in October, according to figures from Semiocast. That makes Arabic the eighth most used language on the site.
"We believe that social media will fundamentally change the media industry landscape in the coming years. Twitter will capture and monetize this positive trend," Ahmed Reda Halawani, Kingdom Holding's executive director of private equity and international investments, said in a statement.
The website currently has over 100 million active users, and raised approximately $400 million of new capital last summer. That investment was led by DST Global, the investment firm headed by the Russian billionaire Yuri Milner.