Tencent Holdings Limited announced on Friday that a Tencent-led consortium has exercised a call option to increase its stake in Universal Music … The simplest way to prove the point is to look at the value of Naspers’ indirect stake in Chinese consumer media giant Tencent. Given that Naspers is worth roughly 30% less than the value of its 73% stake … In addition to that it has positions in Mail.ru Group, a Russian internet company that operates one of the largest social networks in that country. On Wednesday, the Tencent stake, since diluted, was valued at around $131 billion. NPSNY 1 Month Total Returns (Daily) Chart Consider that today, Tencent is a roughly $410 billion company, and though Naspers has sold off some of its holdings in the company over the years, it … Naspers $5bn share buyback plans signal unease with tech valuations Dutch-listed investment arm Prosus, best known for its stake in China’s Tencent, says move is ‘a good use of capital’ "The listing of their classifieds business under the OLX brand could be the next step," said Charl Wolmarans, an analyst at Avior Capital Markets in South Africa. Following the Prosus listing, Naspers' weighting in Johannesburg's top 40 should fall to around 18%-19%, said Verster. Tencent blamed that on mobile gaming revenue growth that slowed on a sequential basis, reported CNBC. Naspers wound up selling 22 million Prosus shares, which amounted to 1.4% of Prosus' free-float, bringing Naspers' share of the company down from roughly 73.8% to 72.5%. By using Investopedia, you accept our. Naspers was unfazed by that, telling Bloomberg that it thinks Tencent is “one of the very best growth enterprises in any industry in the world, managed by an exceptionally able team. Naspers has previously sold stakes in Indian. In a press release the company said that with the move to sell up to 190 million shares of the Chinese company behind the popular WeChat messaging app, it will reduce its stake to 31.2% from 33.2%. Much of Naspers' growth … Prosus has a market capitalization of about 135 billion euros ($158 billion), while the Tencent stake is worth about 193 billion euros … Emerging markets media giant Naspers has raised $9.8-billion by selling a 2% stake in Chinese messaging behemoth Tencent, which has lost $51-billion in value … Naspers paid $34 million for its original Tencent stake in 2001, and Tencent is now one of the world’s most valuable companies. Naspers' announcement comes just after Tencent reported results for the last three months of 2017 and warned that it will give up short-term margins to go after growth initiatives. It noted that Tencent understands and supports the sale. Called Prosus, the company was worth €95 billion ($105 billion) at listing, making it the biggest consumer tech stock in Europe and the second biggest tech company in the region behind German software group. Naspers paid $34 million for its original Tencent stake in 2001, and Tencent is now one of the world's most valuable companies. One motivation for spinning off Prosus is to narrow that value gap. – Naspers said on March 23 it had raised $9.8 billion from the sale of a 2% stake in Tencent … The listing by South African media conglomerate Naspers of assets including part of its Tencent stake via the new Prosus vehicle in Amsterdam in September was heralded as a way to reduce the deep discount to net asset value (NAV) at which Naspers shares trade. The Chinese company has a market capitalization of around $500 billion. Here's why, See Walmart's self-driving delivery trucks in action, This robotaxi from Amazon's Zoox has no reverse function, Watch: Airbnb founder stunned on live TV by stock price, Hear Ashton Kutcher's plea to lawmakers on proposed child abuse legislation, These Trump supporters say big tech is biased. But Naspers trades at a 30% discount to the value of its Tencent stake. All times are ET. (See more: China to Woo Foreign-Listed Tech Giants Back Home. It’s about 14 months since the listing and the gap between the market value of Naspers and Prosus relative to their Tencent stake has widened rather … On the one hand, the performance of Tencent has been incredibly successful – more so then anyone could have imagine. Naspers owns a third of Tencent, the fastest-growing internet company in the world. Naspers paid just $32 million back in 2001 for its stake in Tencent. But the windfall gains created a headache for Naspers. Factset: FactSet Research Systems Inc.2018. Updated 1647 GMT (0047 HKT) September 11, 2019. Bernie Madoff is an American financier who ran a multibillion-dollar Ponzi scheme that is considered the largest financial fraud of all time. Even when Tencent is excluded, Naspers has delivered returns of more than 20% a year, considerably outperforming most equity markets, said Ruan Stander, a portfolio manager at Cape Town-based asset manager, Allan Gray. All rights reserved. Naspers paid $32 million for a 46.5 percent stake in 2001, in the Chinese company’s early stages. Therefore, Naspers holds an effective 22% of Tencent (72% x 31%). The deal also carries some risk for Naspers. Naspers told the paper that it doesn’t plan on selling any more of its Tencent shares for at least three years. 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Naspers Limited is a multinational consumer Internet company headquartered in South Africa. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Tencent’s largest investor is listing its $134 billion stake in the Chinese internet giant in Europe. On Jan. 21, Naspers proposed selling more Prosus shares to institutional investors in Europe, and closed the sale the very next day. The value of the Tencent stake still eclipses the value of the entire company. All rights reserved. CNN Sans ⢠& © 2016 Cable News Network. Naspers Limited (NPSNY), the South African internet and media company, is selling $10.6 billion of its Tencent Holdings (TCEHY) stock, equal to about 2 percent of the total outstanding shares. Tencent, the Chinese company 31% owned by Naspers, has had a storming year, with the share advancing by 43.4%, valuing the company at … As a result, Naspers traded at a discount of about 30%-35% of the value of its assets, said Jean Pierre Verster, founder and CEO of Protea Capital Management. But Naspers is already trading at a massive 30% discount to the value of its stake in Tencent. Investment from actively managed European, growth and technology funds is expected to top that, Naspers CEO Bob van Dijk said in a. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. "The year of 2017 was really a stellar year for Tencent. It's now going to focus on growing global businesses in online classifieds, food delivery, and payments and fintech, van Dijk said. London (CNN Business)Europe has a new tech giant. Though Naspers' market cap is still about 20% below the value of its Tencent stake, the gap has narrowed over the past month in anticipation of the spinoff. ), Investopedia uses cookies to provide you with a great user experience. Naspers paid $34 million for its original Tencent stake in 2001, and Tencent is now one of the world's most valuable companies. Its principal operations include online classified advertising, fintech, payments, and food delivery. Prosus shares soared 26% by the close, boosting its market value to €120 billion ($132 billion). Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Naspers before them traded for years at a similar discount to the value of that Tencent stake, sometimes getting to near 40% when sentiment was negative about the South Africa connection, or the ability of Naspers to do anything beyond that Tencent investment. Emerging markets media giant Naspers has raised $9.8-billion by selling a 2% stake in Chinese messaging behemoth Tencent, which has lost $51-billion in value in the past two days. A Review of Pink Sheet Stocks and How Investors Can Trade Them, China to Woo Foreign-Listed Tech Giants Back Home. BATX stocks refer to the stocks of four of the Chinese technology giants: Baidu, Alibaba, Tencent, and Xiaomi. The proceeds of the stock sale will go to “reinforce” the balance sheet of Naspers and to accelerate the growth of its classifieds, online food delivery and fintech businesses around the world. A retail industry ETF is an exchange-traded fund that invests in retail companies. Morningstar: Copyright 2018 Morningstar, Inc. All Rights Reserved. ”In reporting quarterly results, Tencent said it plans to increase its investments in video, payments and artificial intelligence. – Naspers is valued at a steep discount to the market value of its 31.2% stake in Tencent. The firm owns 2.2% of Naspers. Disclaimer. While Naspers has been around since 1915, created back then as a newspaper publisher, its value has soared in large part because of its stake in Tencent. Much of Naspers' growth in … Naspers spun off most of its internet assets into Prosus just over a year ago in part to resolve the problem, but the move has made little difference. Pink sheet companies are not usually listed on a major exchange. It accounted for 25% of the combined value of the 40 biggest companies on the Johannesburg Stock Exchange â up from 5% just five years ago. Because Naspers has gone up so much in value – largely thanks to its stake in Tencent – Naspers now makes up roughly a quarter of the value of the main South Africa stock index. David Einhorn is a hedge fund manager known for his short selling strategy. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC 2018 and/or its affiliates. That sank shares, with the stock down 5%, according to Bloomberg. This puts Naspers in a familiar position. Now, Tencent’s market cap is $660bn in round numbers. Naspers has long been trying to close a discount between its stock price and that of its underlying assets, including an around 30% stake in Chinese internet giant Tencent Holdings . Net income for the last quarter of 2017 jumped 98% to $3.29 billion while the 51% increase in revenue was weaker than what analysts were looking for. Therefore, for the year 2018, we are planning to step up our investment in a number of key areas." Pink sheets refer to a listing service for stocks that trade over-the-counter (OTC). As of Monday, Prosus’s market cap of R2.8-trillion is just about 20% less than its stake in Tencent. The investment has … Naspers Limited (NPSNY), the South African internet and media company, is selling $10.6 billion of its Tencent Holdings (TCEHY) stock, equal to about 2 percent of the total outstanding shares. Naspers, then, is effectively a geared play on a Tencent stake which the Johannesburg market is structurally unable to accurately value. Tencent, which owns the WeChat messaging platform and a host of payment apps and mobile games, is one of China's largest technology groups. It should become clearer to investors how its other bets are performing, which could determine whether the discount on the stock narrows further. The return makes Naspers’ stake in Tencent among the top-performing venture investments of all time. -10.50 -1.68% Naspers Ltd. plans to carve out its internet businesses, including a $133-billion stake in China’s Tencent Holdings Ltd. that has long … Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Naspers plans to carve out its internet businesses, including a US$133-billion stake in China’s Tencent Holdings that has long exceeded the South African technology investor’s own market value. Naspers holds 72% of Prosus and Prosus owns 31% of Tencent. Many of the achievements are the result of investment we made years ago," the company's president, Martin Lau, said at a media briefing in Hong Kong covered by CNBC. The Tencent stake has been worth more than Naspers itself for years, and dominated the $103 billion group's finances. The value of the stake in Tencent was $175 billion in March, when Naspers raised nearly $10 billion by selling it down from 33% to 31%. Analysts are predicting that its stake, currently valued at R2.2 trillion, could be worth R600 billion more in a year's time. 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' curre… That investment is now worth €118 billion ($130 billion). That's where the move to Amsterdam should help. Naspers Ltd. said a newly created entity containing assets including a stake in Chinese internet giant Tencent Holdings Ltd. will be valued at about … The Securities and Exchange Commission (SEC) does not regulate the pink sheet filing requirements. Naspers Listing Looks to Unlock Value in $122 Billion Tencent Stake Africa’s most valuable company has set a July listing in Amsterdam, which will hold its internet assets That forced investors to sell Naspers' shares so they weren't overly exposed to a single stock. Finding solutions on profitability and the size of Naspers in relation to the JSE would go “a long way in reducing the discount sustainably,” says Takaendesa. Much of Naspers’ growth … Coverage initiated is when a brokerage or analyst issues their first rating on a particular stock, and is especially relevant after a company has gone public. Naspers will continue to own at least 73% of Prosus, which also holds other technology assets, Naspers estimates that demand from passive investors for shares in Prosus could total as much as $3 billion, following the stock's inclusion in a number of large global indexes. 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