INFLUENTIAL Saudi investor Prince Alwaleed bin Talal has revealed that he was uneasy about Facebook’s initial public offering (IPO), saying the company was not a strong candidate for growth.
The billionaire declined to invest in Mark Zuckerberg’s company when it floated in May at $38 a share, a price which fell to below half that this summer before recovering in the last few weeks.
Prince Alwaleed, who is an early investor in Twitter, and owns a large stake in Rupert Murdoch’s News Corp, told Middle East magazine Arabian Business: “[The company] was priced at an extremely high side at $38.
“When we invest in a company we like to get good returns for our shareholders. [With Facebook], I did not feel comfortable from the beginning.”
His comments are in line with many who have said that Facebook was overpriced when it went public, with unrealistic expectations for future growth.
But the Prince said he sees Facebook rival Twitter as having the opportunity to be a very sound investment. His company, Kingdom Holding, bought a $300m (£186m) stake in the company last year.
“We entered Twitter when it was a growth company,” Prince Alwaleed said. “We entered at the right time. We will get our return on investment.”
Twitter, which now has more than 500m members, is tipped for an IPO in the coming years.