Marc Hasenfuss Editor-at-large

I suspect that for many years investors, when engaging on crazy valuations, will be telling tales of the attempted and aborted listing of Sagarmatha Technologies on the JSE. To participate in the listing, investors were required to take an enormous leap of faith that the directors of Sagarmatha could build rapidly on a small collection of fledgling, loss-making operations. Putting anything between R3bn to R7.5bn into Sagarmatha would have given the directors a huge licence for deal making — which, of course, comes with large execution risks in terms of overpaying for assets in an eagerness to build cash flow-generative platforms and operational scale. To put it into some capital-raising context, African Rainbow Capital Investments (ARC) — which holds a substantial portfolio of investments, including some promising positions in the financial services and telecoms sectors — raised R4.3bn when it listed on the JSE last year. Let’s be honest, it carries a good deal more tangible value t...

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