Saudi Arabian prince snaps up a $250m stake in Snap for 2.3 per cent | City A.M.
Snap caught a second-wind after posting its results last night, when Saudi Arabia’s Prince Alwaleed bin Talal tweeted that he has invested $250m (£193.2m) into the company in exchange for a 2.3 per cent stake.
The stake is valued at $10.8bn, despite Snap’s overall market capitalisation sitting at just $17bn.
Shares in Snap jumped by an initial 11 per cent in after-hours trading last night on the back of the news, but have since sunk to just below its closing price.
The group reported a loss of 3m daily active users in its second quarter results, contributing to a net loss for Snap of $353m.
Read more: Snap loses 3m daily active users but defies analyst expectations on revenue
However it beat analyst expectations on revenue to rake in $262m over the last three months, indicating that while users may not be too keen on its Snapchat product since its design overhaul, advertisers are thinking differently.
إستثمرت ٩٥٠ مليون ريال سعودي لاتمام صفقة شراء حصة بنسبة ٢,٣٪ في شركة سناب شاتhttps://t.co/XXOgEvEB2WI invested $250 Million to acquire 2.3% stake in @Snapchat companyhttps://t.co/bdAMGVw3DI pic.twitter.com/jBIiAfqy7t— الوليد بن طلال (@Alwaleed_Talal) August 7, 2018
Alwaleed has made other prolific investments into tech groups across the world, holding stakes in companies such as Lyft, Twitter, and China’s JD.com.
The news marks the second investment made by Alwaleed since being arrested as part of the government’s anti-corruption drive in 2017. He was later released at the end of January this year, and made his first investment into European music service Deezer at the end of July.
A video was attached to the tweet which documented the moment Alwaleed met Snap’s chief executive Evan Spiegel two years ago, when Spiegel visited Riyadh alongside the company’s chief strategy officer Imran Khan.
Alwaleed said in a statement: “Snapchat is one of the most innovative social media platforms in the world and we believe it has only just begun to scratch the surface of its true potential and we are blessed to be part of it.”