{"id":474555,"date":"2022-12-17T06:53:51","date_gmt":"2022-12-17T04:53:51","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=474555"},"modified":"2022-12-17T06:56:07","modified_gmt":"2022-12-17T04:56:07","slug":"naspers-value-destruction","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/investing\/474555-naspers-value-destruction.html","title":{"rendered":"Naspers value destruction"},"content":{"rendered":"

Naspers is promising investors that its ecommerce portfolio will be profitable by 2025, but many investors have lost trust in its management team to deliver.<\/p>\n

Naspers\u2019 success is a result of its large stake in Tencent. In May 2001, it acquired a 46.5% interest in Tencent, which operated an instant messaging platform in China called QQ.<\/p>\n

Tencent showed rapid growth after the acquisition and became one of the world\u2019s largest Internet and technology companies. It is also a global leader in the video game industry.<\/p>\n

Its market cap peaked at over $900 billion in February 2021 but pulled back significantly following a crackdown by the Chinese government on large tech companies.<\/p>\n

Over the years, Naspers has made numerous investments in search of its new big winner. However, it has failed to produce significant returns on its investments.<\/p>\n

As part of their strategy, Naspers and Prosus have sold a significant portion of their Tencent stake to fund acquisitions and buy back their own stock.<\/p>\n

Despite a buying spree in which Naspers and Prosus spent billions, many analysts doubt that their non-Tencent assets are worth much.<\/p>\n

Naspers and Prosus continue to trade at a big discount to net asset value (NAV), which means that the assets they hold are worth much more than their market caps.<\/p>\n

It shows that the market does not trust Naspers\u2019 management, which is why many investors have called on the company to unbundle its Tencent position to unlock shareholder value.<\/p>\n

The unhappiness with Naspers and Prosus\u2019 investment decisions is growing as these companies are not performing well.<\/p>\n

Ranmore fund manager Sean Peche is a vocal critic of Naspers\u2019 management, saying they are behind significant value destruction.<\/p>\n

Peche argued that Naspers and Prosus had created no shareholder value since 2019 because of their poor capital allocation.<\/p>\n

Wayne McCurrie from FNB Wealth is more upbeat about their investments. He believes Prosus\u2019 food delivery businesses will work, which is why he continues to hold Naspers and Prosus.<\/p>\n

Naspers and Prosus\u2019 investments analysed<\/strong><\/h2>\n

To see how Naspers and Prosus\u2019 non-Tencent investments performed, Daily Investor tracked the performance of its other listed assets.<\/p>\n

To track the performance, we assessed what a R100 investment would be worth today if it was invested at the same time Naspers and Prosus bought the companies.<\/p>\n

If the company did not trade publicly when the investment was made, the R100 would be invested during the IPO.<\/p>\n

Prosus announced seven investments in listed companies. The funds invested into these companies would therefore be worth R700.<\/p>\n

Today, the R700 investment by Naspers and Prosus would only be worth R412 \u2014 a holding period loss of 41%.<\/p>\n

The table and charts below give additional information about Naspers and Prosus\u2019 investments and their annualised returns.<\/p>\n

\n
\n\n\n\n\n\n\n\n\n\n
Naspers\/Prosus investment<\/strong><\/td>\nEnding value of R100 investment<\/strong><\/td>\nAnnualised return<\/strong><\/td>\n<\/tr>\n
Similarweb<\/td>\n\u00a0R25.74<\/td>\n-59.53%<\/strong><\/span><\/td>\n<\/tr>\n
Delivery Hero<\/td>\n\u00a0R143.88<\/td>\n+8.42%<\/strong><\/span><\/td>\n<\/tr>\n
Skillsoft<\/td>\n\u00a0R14.74<\/td>\n-61.60%<\/strong><\/span><\/td>\n<\/tr>\n
Remitly<\/td>\n\u00a0R21.38<\/td>\n-70.89%<\/strong><\/span><\/td>\n<\/tr>\n
Trip.com<\/td>\n\u00a0R71.72<\/td>\n-8.66%<\/strong><\/span><\/td>\n<\/tr>\n
Sinch AB<\/td>\n\u00a0R89.65<\/td>\n-3.90%<\/strong><\/span><\/td>\n<\/tr>\n
Udemy<\/td>\n\u00a0R44.51<\/td>\n-52.09%<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n
\n

Similarweb<\/h2>\n

\"\"<\/a><\/p>\n

\n

Delivery Hero<\/h2>\n

\"\"<\/a><\/p>\n

\n

Skillsoft<\/h2>\n

\"\"<\/a><\/p>\n

\n

Remitly<\/h2>\n

\"\"<\/a><\/p>\n

\n

Trip.com<\/strong><\/h2>\n

\"\"<\/a><\/p>\n

\n

Sinch<\/h2>\n

\"\"<\/a><\/p>\n

\n

Udemy<\/strong><\/h2>\n

\"\"<\/a><\/p>\n

\n

This article was published by Daily Investor<\/a><\/strong> and is republished with permission.<\/em><\/p>\n

Now read:\u00a0Takealot makes R224 million loss<\/a><\/h2>\n","protected":false},"excerpt":{"rendered":"

Naspers is promising investors that its ecommerce portfolio will be profitable by 2025, but many investors have lost trust in its management team to deliver.<\/p>\n","protected":false},"author":341111,"featured_media":462807,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[80335],"tags":[35,1643,59639,23941,76620,18941,24394],"class_list":["post-474555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-headline","tag-naspers","tag-prosus","tag-qq","tag-sean-peche","tag-tencent","tag-wayne-mccurrie"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/474555"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341111"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=474555"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/474555\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/462807"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=474555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=474555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=474555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}