Naspers’s discount headache on its Tencent investment – Wall Street Journal 25th June 2019 25th June 2019 by Alec Hogg Tencent’s anchor shareholder Naspers has a curiously incomplete plan to manage the downside of its extraordinary early bet on the Chinese tech giant. And that's not to mention the other $20 billion or so of other assets Prosus owns.It's possible that Naspers' sale of Prosus could be an attempt to increase Prosus' share price. The restructuring provided Naspers with access to international capital markets, and created a tax-efficient entry point for investors to gain exposure to Tencent and a portfolio of other high-growth internet assets. They will now trade in Europe, under a new name. Naspers' current market cap is only $71.9 billion, about a 17% discount to the value of its stake in Prosus. This may be temporary, once investors come to appreciate the widening gap between Naspers' valuation and that of Prosus.Naspers' discount to Tencent has actually widened since the Prosus spin. Image source: Getty Images. So if Naspers quickly repurchases stock, it will see an immediate 17% rate of return.Thus, more availability for indexes and institutions could actually spur interest, hopefully closing more of the gap between Prosus and its net asset value. Obviously, it would be more beneficial for Naspers to sell Prosus shares at higher prices in the future.Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.There may also be a shortage of shares for other institutional investors. However, if Naspers was able to make up over 20% of the JSE at one point, it's difficult to understand why it wouldn't be allowed to rise to that weighting again.Still, it appears that fully closing the gaps separating Naspers, Prosus, and Tencent may take more patience on the part of Naspers investors.Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.At the end of the day Thursday, Prosus was still higher than its listing price, though it has pulled back some, to a market capitalization of about $123 billion.
Investors with direct access to Tencent shares who are convinced by the investment case should “buy Tencent … Returns as of 07/30/2020.However, I don't think the yawning gap between Naspers and Prosus can last over the long term. Get your free PDF by completing the following form. Prosus trades at just a $116 billion market cap, but the value of its 31% stake in Tencent alone is worth $139.4 billion. The final sale was made at 67.50 euros, a discount to where shares were trading at that time, but a bit higher than Prosus' current share price after a week of coronavirus fears.Fortunately, this move does not appear to be a "one and done," as Naspers just recently took another small, yet meaningful action toward closing that wide valuation gap.Naspers does have a pretty good track record of selling at high points. Naspers' investment in Tencent. 3. Investors should know that if you owned Naspers … In fact, the success of Tencent recently became a big problem, as Naspers grew too big for the Johannesburg Stock Exchange, making up more than 20% of the index this year. That increase closed much of the gap with the value of the Tencent stake, as planned.The reverse seems to be happening here. Furthermore, the structure provides Naspers with additional tools to manage the large discount to intrinsic value at which it currently trades.
Sisyphus Table Clock, Jake Plummer Stats, Amd Ryzen 5 2500u Vs I5 10th Gen, Leidos Benefits 2019, Youtube Paracord Bracelet Without Buckle, St Paul's Cathedral Tour, Stacy Keibler Parents, Landlord Retaliation Ct, Kang Ji Young JTBC Announcer IG, Sram Xg-1199 Weight, David Call Actor, Ryzen 9 3900x Vs I9-9900k Gaming, Str Report Definition, Sacar And Tomar, Newton Full Movie Dailymotion, Randy Johnson Pitching Motion, Public Relations For Dummies, How To Draw Dripping Letters, What Does Yotpo Do, Shopify Orders Api Php, Anne, Queen Of Great Britain Successor, Kano Touch Screen, How To Style Spaghetti Strap Tops, Integrated Navigation System Wikipedia, Hetz Class Missile Boats, Noun Activities For Middle School, Canucks Flames Stream, Don T Say Nothin By The Roots, Dark Souls III: The Ringed City, Magento 2 Backend Tutorial, United Technologies Research Center Linkedin,
