Naspers was one of the top-performing shares on the Johannesburg Stock Exchange (JSE) over the last twenty years, with a compounded annual return of 32%.
Naspers was founded in 1915 as Die Nasionale Pers. It had a newspaper called Die Burger and published its first magazine, Die Huisgenoot.
Die Nasionale Pers expanded its portfolio to include book publishing services in 1918 under the De Burger Boekhandel brand.
In the 1980s, Naspers launched the pay-television service M-Net, which later gave birth to MultiChoice and DStv.
Die Nasionale Pers was listed on the JSE in 1998 and changed its name to Naspers.
The company’s breakthrough came in 2001 when it acquired a 46.5% interest in Tencent, a Chinese tech company with instant messaging service QQ.
The Tencent investment has served Naspers well. Tencent’s market cap grew from R5.3 billion to its current market cap of R83.3 trillion.
Following many years of exceptional share price growth, Naspers started to stagnate, which caused shareholder discontent.
It threw shareholders a bone by unbundling MultiChoice and listing it separately on the JSE, but the discount to its Tencent stake grew.
In a perplexing move, Naspers created Prosus as a separate holding company for most of its investments, with a primary listing on Euronext Amsterdam.
Creating Prosus did little to narrow Naspers’ trading discount, and its next move was to buy back its stock by selling bits of its Tencent stake.
To date, it has sold over 193 million shares on the open market worth roughly $7.2 billion. This has reduced Prosus’ stake in Tencent from 29% to 26.9%.
Despite the vast trading discount and a lack of growth in recent years, Naspers was still one of the top-performing South African shares over the last 20 years.
Tencent’s colossal success has helped Naspers to achieve a compounded annual return of 32% in two decades.
Put another way, a R1,000 investment in Naspers in 2003 would now be worth R245,811.