Naspers (OTC: NPSNY) is mostly known for its giant stake in Chinese internet conglomerate Tencent (OTC: TCEHY), a massive investment win that Naspers made all the way back in 2001. The Tencent investment was certainly a blessing for Naspers over the long-term, transforming the South African media company into a global technology investment powerhouse.
However, that blessing became a curse when Tencent's skyrocketing size soon made Naspers too large a company for the relatively small Johannesburg Stock Exchange, making up around 25% of the entire market as of early 2019. Since many asset managers and indexes couldn't allocate full positions to Naspers because of its size, its share price has been "trapped" at a discount to its Tencent stake for some time.
Naspers took a big first step last year when it spun off its non-South African technology assets into a separate company called Prosus (OTC: PROSY), which was executed in September, and in which Naspers retained a 73.8% stake. Though that led to some narrowing of the discount between Prosus and the value of its Tencent stake, the narrowing was fairly minor, and left much to be desired. Even worse, Naspers continued to trade at a stubborn discount even to the value of its Prosus stake afterwards.