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Naspers sells Flipkart stake for $2.2 billion

The big news yesterday was Walmart confirming their $16 billion purchase of India's Flipkart. For Naspers, they ended up selling their entire 11.18% stake for $2.2 billion, very good going considering that they only invested $616 million. Over the last two months Naspers has realised $12 billion from sales in their holdings, a nice and juicy R150 billion looking for a home. Here is what the company say they have the money earmarked for:

    "The proceeds will be used to reinforce Naspers' balance sheet and will be invested over time to accelerate the growth of Naspers' classifieds, online food delivery and fintech businesses globally, and to pursue other exciting growth opportunities when they arise."


To put things into perspective though, the Flipkart sale was a huge win for the company, but the R28 billion realised is rather small compared to Tencent. Naspers stake in Tencent is currently worth slightly more than R1.8 trillion (Naspers market cap is currently R1.35 trillion), meaning that for every 1% move in the Tencent share price, it changes the holding value by R18 billion. As I write, Tencent is up 2% today, meaning that Naspers's holding value of Tencent is up R36 billion, more than the entire value realised from Flipkart!

All in all, cold hard cash is better than paper profits. Management will need to find some amazing places to deploy that money to move the needle when compared to Tencent.


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