The Prosus / Tencent Stocks Discount Situation

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The Prosus / Tencent Stocks Discount Situation

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35 Comments

  1. Great video. I like to keep it as simple/stupid as possible: I just buy Tencent directly in hk, because I like the business and I think it’s fair value. Prosus just adds several layers to an already indirect ownership

  2. Wonder if Prosus still has any risks associated with its Parent Company based in South Africa or is it free of that risk now? I used to follow it but not for a few years now.

  3. Softbank has a similar “value” setup as Tencent don’t know if it is better or worse than it.

  4. Avoid this purchase, the discount is justified. Incompetent management. I made a nice double buying the bottom, sold to load up on more Alibaba.

  5. Prosus is a tricky company to value due to its unique shareholder structure, which disadvantages investors outside of Naspers. Prosus continues to struggle with profitability, with none of its businesses generating noteworthy bottom-line profit, and its value is still heavily dependent on Tencent.

  6. Thanks for the update Sven. I’m not sure if this is how you pronounce fintech in your country but in the US, phoenteically it’s pronounced fin-teck, not fin-tetch.

  7. Great video! I suspect the discount with Tencent will never disappear. Basically Prosus is 75% Tencent 25% speculative. I bought some Prosus shares disregarding the 25% bets, you very well covered the business and its layers.

  8. If there was an obvious arbitrage, it would have disappeared long ago.
    Investors who want to own Tencent may simply want to own Tencent, without any garbage attached.
    People just can’t help but make investing unnecessarily complicated.

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  9. Would it be a good idea to make a arbitraje pair operation? Like to buy prosus and sell tencent betting that the gap gets smaller

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  10. Is very different to own tencent that to own a company that owns another company that owns tencent
    The gap may be justified

  11. Thank u so much !! was very much looking forward for this video.
    how come prosus isnt paying capital gains tax for selling 10cent?
    sorry still a bit confused, what is the total market cap? is it 65B euro (27.92 share price)?

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  14. Didn’t management at Prosus announce they were going to continue to sell down the Tencent stake to buyback shares AND invest in their own portfolio of companies. Most of which appear to be second class money losing tech companies. I would assign negative value to their current portfolio as it’s a drag on the tencent position. Also factor in that any more spins from Tencent have not been passed through to Prosus share holders but kept in Prosus. Is 40% a justified discount? I would say maybe with managements poor capital allocation plans.

  15. The discount is in owning Tencent cheaper. But they are selling Tencent and buying back their own shares, thus losing the discount on Tencent and losing Tencent while that’s where the value is/was. That sounds weird to me. Buy back shares withouth selling Tencent shares is where they value would increase.

    1. The value created is the % of ownership of Tencent per share. Even though the absolute ownership of Tencent lowers, the relative ownership of Tencent per share increases

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