MANAGEMENT VALUE
BRIAN KANTOR: Naspers needs to prove investors wrong
‘Unfortunately for management, the market is now much more pessimistic about their capabilities’
At the recent Naspers annual meeting, shareholders were at serious odds with management about the value of their contribution to the company. Amid all the sturm und drang and misconceptions about how to measure the performance of the managers, some facts of the matter deserve proper recognition. That is, Naspers managers are expected — emphasis on expected — to destroy the wealth of their shareholders on a heroic, or is it tragic, scale. Were Naspers simply a pure clone of Tencent (that is, the company did nothing but collect and distribute to shareholders the dividends it received for its 34.33% share of Tencent), the Naspers stake would be valued as is Tencent itself, worth close to R1.6-trillion. The market value of Naspers is much less than this — about R1.3-trillion, a staggering R300bn less than the value of its Tencent stake.The correct logical conclusion to come to is that the market expects Naspers managers to destroy value for them. That is, the ambitious capital-investmen...
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