Thinking about investing in Prosus? Take a look at our comprehensive guide to find out all you need to know before taking the plunge.
September 11, 2019 was a memorable day for Prosus and for the European stock exchange. The day marked the entry of the company in the Amsterdam stock exchange. The group quickly became the second largest Internet company in Europe.
Unknown to the general public before this date, Prosus is currently popular and present in various Internet-related sectors. But is this position enough to make you invest in Prosus stock ? A more in-depth analysis of Prosus is required before taking the plunge.
Prosus is a subsidiary of the South African group Naspers Ltd. The group owes its success to a smart investment by Naspers ltd. The history of these two companies is so closely linked that it is worth taking a closer look at this South African market leader.
Naspers is derived from two Afrikaans words "nasionale pers" meaning "national press". It is a South African media company with a conglomerate of presses and media. In the late 1970s and 1980s, Naspers devoted most of its activity to television.
In the 1990s, it expanded its activities to the Internet. As the African market was no longer sufficient to develop, Naspers turned to the Asian market and particularly the Chinese one. In 2001, in order to expand into the Chinese market, Naspers invested in the capital of the Chinese company Tencent, which was founded in 1998. Currently, Tencent is one of the top 10 largest market capitalizations in the world. The Naspers Group, which owns 31% of Tencent's capital, has transferred its stake in the WeChat messaging service to Prosus.
In addition, Naspers has integrated participation in the Russian network mail.ru and in the German food delivery service Delivery Hero into Prosus' activities.
The predominance of Naspers in the South African stock index is a handicap for portfolio managers. Indeed, Naspers holds a market capitalization of more than one hundred and twenty-five billion euros in Tencent, which is too large for the South African stock market. Migration to a larger market was therefore necessary.
The listing of Prosus on the Amsterdam Stock Exchange in 2019 was the culmination of a strategic choice for Naspers. First, the stock market is one of the largest in the world. Secondly, in the face of competition between two superpowers, China and the US, the European market has become a safe and comfortable haven.
The technology sector is evolving very rapidly and remains a dynamic and promising field. The business of the future is largely based on technology. Prosus has a great potential to develop in this field and can compete to maintain and even expand its market. As a reminder, the activities of Prosus can be summarized in two points:
Prosus is listed on the Amsterdam Stock Exchange on one of the Euronext markets. The first days were marked by a strong valuation of Prosus shares. Within a few hours, the share price had already risen by more than 26.32% compared to the IPO value. The share was valued at 74.15 euros. The market is stable and the stock was trading at 94.6 euros on March 30, 2021.
Here are some important figures: