Summary
Naspers (NPSNY) owns 31.2% of Tencent’s (TCEHY) shares, valued in the market at $118B. Naspers also invests in many other startup companies that operate in over 120 countries, and serving over 2 billion customers. However, Naspers’ capitalization ($86B) is a fraction of the value of just its Tencent holdings.
This paper realizes that there is a hedging opportunity as a result of this heavy discount. The paper studies this discount in detail and attempts to provide an explanation for it. The paper also presents the hedging process details (including the