Naspers execs sell R1.8 billion in shares amidst buyback scheme

Naspers CEO Bob van Dijk and CFO Basil Sgourdos have sold R1.8 billion of their Naspers and Prosus shares after the companies announced their buyback scheme in June 2022.

Two other directors – Mark Sorour and Steve Pacak – have also sold shares shortly after the share repurchase programme was announced.

Naspers and Prosus announced their share repurchase programme in June 2022, where they are selling part of their Tencent stake to buy back their own stock.

Van Dijk told investors that the share repurchasing programme was designed to unlock significant value for their shareholders over time.

He said it was designed to increase net asset value per share, taking advantage of Prosus’ and Naspers’ trading discounts to their underlying net asset value.

The repurchase programme is open-ended and will run as long as elevated levels of the trading discount to the group’s underlying net asset value persist.

“We expect the programme to significantly increase the net asset values per share for Prosus and Naspers,” Van Dijk said.

Within days after the share buyback announcement was made, Sorour and Pacak sold a combined R165 million in shares.

Over the next six months, Van Dijk and Sgourdos offloaded R1.82 billion in Naspers and Prosus shares.

It did not sit well with some industry players, including Counterpoint Asset Management executive director and portfolio manager Piet Viljoen.

“Directors of Naspers are selling large chunks of shares while the company is in a buyback program. Have they no shame?” Viljoen said.

He highlighted that it is never a good sign when executives sell shares when a repurchase programme is ongoing.

He previously said if Naspers’ management was truly concerned about creating shareholder value, they would unbundle their Tencent stake and give investors the full value of their holding.

It would be the easiest and cheapest way to narrow the discount at which Naspers was trading.

It did not happen. Naspers first created Prosus, and when it did not narrow the discount, it started the share repurchasing program.

Curiously, at the end of August 2022, only two months after the buyback announcement was made, Van Dijk went on a Naspers share disposal spree to the value of R1.72 billion.

The Naspers CEO’s selling spree formed part of a R1.99 billion share sale by Naspers directors since the buyback programme was announced.

During this period, not a single Naspers director bought shares in either Naspers or Prosus.

Many investors see this as counter-intuitive and contrary to the narrative of the Naspers and Prosus shares trading at a massive discount.

If management truly believed in the huge discount and its plan to narrow the gap, why would they sell shares in Naspers and Prosus instead of buying them?

Commenting on the sale of shares by directors, Naspers told Daily Investor that its executive team remains strongly aligned with shareholders through their participation in LTI plans, as disclosed in its remuneration report.

“The open-ended buyback programme is unlocking tremendous value, as it meaningfully improves net asset value (NAV) per share, creating permanent value for shareholders that will compound over time,” Naspers added.

“We expect it to continue for the foreseeable future.”

The table below provides an overview of share trades by Naspers directors since the announcement of the share repurchasing programme.

DateDirectorPositionShares soldValue
29-JunMark SorourDirector6766R15,433,275.99
08-JulSteve PacakDirector54000R149,160,707.34
29-AugBob van DijkCEO69225R175,617,573.98
30-AugBob van DijkCEO109393R268,346,947.16
31-AugBob van DijkCEO233835R571,255,794.99
01-SepBob van DijkCEO106377R255,884,256.79
02-SepBob van DijkCEO123995R291,868,879.42
05-SepBob van DijkCEO32590R77,226,062.46
07-DecBob van DijkCEO31395R82,796,611.31
07-DecBasil SgourdosCFO2451R6,463,911.27
27-JanBasil SgourdosCFO27360R92,438,255.23
Total797387 R1,986,492,275.94