Beware of prophecies

Analysts with a sceptical take on the Naspers story would do well to remember the story of Cassandra, princess of Troy, who made the deep strategic error of backing out of a promise to indulge in sex with the god Apollo. As a result she had the gift of prophecy, but was cursed so that nobody would believe a word she said. This may well be a familiar feeling for those who have been saying Naspers is overpriced as it continues to get ever more expensive.

The other accusation that has been hurled in Naspers’s general direction is that it’s a one-trick pony that lucked into an investment in Tencent. While it’s true that you’d have had to be a mighty effective fortune teller to predict the extraordinary growth that Tencent has achieved, Naspers’s results show that it has been deploying the bounty that Tencent spews out into a number of interesting areas.

Tencent continues to power on, and Naspers took the opportunity to offload a 2% slice of the company for a solid Us$9.8bn in the period.

Naspers is now operational in over 120 countries and markets around the world, and the plan is to use its bulging balance sheet to drive the growth of its classifieds, food delivery and fintech businesses, and to pile into other interesting opportunities as they arise.

Along with many other big players it is sniffing around areas such as artificial intelligence and machine learning, where there is the headroom to build businesses heading in directions that are rather opaque from today’s viewpoint, but which offer enormous potential for the future.

Naspers’s results show it has been deploying the bounty that Tencent spews out into a number of areas