PROSY - Prosus Makes Another Huge Move to Close Its Discount to Tencent
On the heels of its recent $14.6 billion sale of Tencent (OTC: TCEHY) shares, European technology holding company Prosus (OTC: PROSY) , which is majority-owned by South African firm Naspers (OTC: NPSNY) , just made another significant move to close its huge discount to the value of its assets. Prosus' technology assets include a still-massive 29% stake in Chinese internet giant Tencent, as well as other internet businesses across food delivery, online classifieds, digital payments, and agriculture technology.
Despite Naspers having spun off Prosus in 2019 and repurchasing $5 billion in stock beginning in 2020, the massive discount in both of these holding companies remains. Management estimates Prosus' net asset value (NAV) is roughly $257 billion, but its current market cap is only $163 billion, good for a huge 37% discount. Meanwhile, via its roughly 73% stake in Prosus, Naspers' net asset value is estimated at $187 billion, yet its market cap is only $92 billion, more than a 50% discount!
In an effort to remove some of the structural impediments that may be leading to this chronic undervaluation, Prosus just unveiled another big step on this multiyear financial engineering journey -- but will it work this time?
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Prosus Makes Another Huge Move to Close Its Discount to Tencent