The numbers in the world of Big Tech are staggering: consider that Amazon’s market cap of $1.5-trillion is five times the size of SA’s GDP, for example. In that context, Prosus’s $5bn spend on a share buyback — of its own and parent Naspers’s stock — seems relatively puny. In rand terms, however, it’s an R80bn windfall for frustrated investors who’ve watched the gap between the value of Prosus and Naspers widen against their interest in Chinese internet sensation Tencent, not diminish.

Part of the stated reason for the buyback is that tech assets, after a glorious year for the sector, are overvalued, and it’s encouraging that Prosus management is not going to lose its head over an overpriced acquisition binge. But it is also a mark of failure that Prosus has been unable to buy companies which would lessen the importance of Tencent to the SA-and Amsterdam-listed holding companies. The fact is that nothing so far has worked to narrow the discount between Naspers, Prosus and their Chinese winner, and arguably, efforts to do so, like creating Prosus and listing it on the Euro Stoxx 50 exchange, have probably just made the entire edifice more complicated.

Prosus critics argue that it must buy companies — but can’t because the stock is cheap. Which suggests a state of protracted limbo, unless and until Tencent is unbundled.


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