Perhaps not everyone knows that the most expensive public company in Africa does not produce diamonds or uranium, and information. This company is Naspers.
Life of Naspers is divided into two periods: before 2001 and after. The fact is that in 2001, Naspers made a successful investment that changed its history. That year, the management made a bold decision to invest $32 million in the Chinese company Tencent, which was significant for Naspers at that time.
Today Tencent is one of the largest investment companies in the world. The Fund specializes in investments in high-tech businesses, including Internet services, social networks, AI, as well as payment systems, mobile and online games. Since 2004, Tencent is a public company, its market capitalization now exceeds $400 billion, Naspers's Share in Tencent is 31%.
The chart of Naspers shares from Bloomberg shows that the phenomenal growth of the company's securities is directly related to the dynamics of Tencent shares.
The capitalization of Naspers is about $100 billion, which is surprisingly less than the cost of its share in Tencent ($124 billion). Apparently, conglomerate discount affects, as Naspers has many other successful investments in addition to the Chinese giant. For example, long-Naspers owns shares in the Russian Mail.ru Group and of the company Avito share Naspers achieves of 99.6%.
To unlock value for shareholders, Naspers plans to place all its technological assets outside Africa, including Tencent, in the form of a new company on the European Euronext exchange by the end of this year.
According to Internet sources, the company Naspers (then called De Nasionale Pers) was founded in 1914-15 in Stellenbosch, 50 km from Cape town by a group of public figures and journalists of Dutch origin ("Afrikaner", as they are called in South Africa) for the production of nationalist and racist Newspapers. The company is criticized for these historical facts. In subsequent years, the company also develops publishing direction. In the 1980s-90s it was already a prominent media holding company with a presence in the niche of pay TV and Internet services. Since 1994, the company has been trading on the stock exchange, and since 1998 it has been called Naspers.
It would have remained Naspers, probably still African media group with local assets if the position of CEO of the company in 1997 did not come media entrepreneur Koos Becker (Koos Bekker). It was he who set the vector of going beyond the boundaries of the media in technology and Internet businesses.
Remember that the passion for the Internet in the late 90s resembled a fever. Since 1995, the shares of tech companies connected in one way or another with the Internet have grown almost exponentially. The climax occurred on March 10, 2000, when the NASDAQ index fell by more than half. This collapse was called "dot-com Bubble".
Against this background, Becker in 2001 makes a bold decision to buy almost half of the little-known Chinese startup Tencent for $32 million.
During the period of Becker at the helm, the capitalization of Naspers increased from $1.2 billion to $45 billion While Becker did not receive salaries or bonuses. The only thing that he owed ā options on shares of Naspers. In 2019, Forbes estimated his personal fortune at $2.3 billion.
Today, Naspers is a global conglomerate of companies in the field of Internet, media and entertainment. There are more than 50 companies in the portfolio. The strategy is to gradually move away from print media related businesses towards online media, e-commerce, online product delivery, and e-Commerce. payments, computer games. And both through the organic growth of current businesses and through investment in new ones. The focus of the company, as before, is investments in ecosystems that allow the user to solve all their needs within the framework of the contour of connected and qualitatively linked businesses. It is assumed that the company's portfolio will be balanced between Mature businesses such as Tencent and venture capital investments.
Video:
ā¢ Koos Bekker on the Future of Media, 2014:
ā¢ Koos Bekker discussions his legacy & history of Naspers, 2014:
p.s. According to the media and the company's website. The publication expresses the personal opinion of the author and should not be the only basis for an investment decision. Investments in securities can be risky.