Prosus’s $1.8 billion online learning acquisition fails to light up share price
NASPERS subsidiary Prosus fell 2.5 percent on the JSE to R1 424.33 yesterday in spite of announcing a $1.8 billion (R24.4bn) deal to acquire the online learning company Stack Overflow.
The acquisition of the online learning platform for developers and technologists seemed well appreciated by analysts and social media though.
But the acquisition failed to stem the downward trend of Naspers and Prosus that started in May, and in spite of generally higher stocks on the JSE that month.
Anchor Capital fund management and analyst Mike Gresty said he believed Prosus’s share was down was because Hong Kong-listed Tencent, which comprises 85 percent of the net asset value of Prosus, was down 2.07 percent when the marked closed in Hong Kong, while Nasdaq futures were down 1.07 percent, directionally providing a sense of where the US market was headed ahead of yesterday’s opening.
Grety said the Stack Overflow acquisition appeared to have made no discernible impact on the share price.
“The price action remains completely dominated by the movements of Tencent. At the margin perhaps, I think there is still a lingering influence from the share exchange announcement between Naspers and Prosus, which I believe has not gone down well among investors thus far,” he said.
Old Mutual Investment Group investment analyst Neelash Hansjee said it was an “exciting” and “big” transaction by Prosus, and where the transaction differed from Prosus’s many other investments was that it was a 100 percent acquisition, instead of taking an investment stake.
“Edtech is a fast growing market. Naspers are long-term investors and this deal to build out Prosus’s Edtech gives an indication of how Prosus’s management are thinking about the way forward,” he said.
@championswimmer wrote on Twitter: “Prosus now owns the whole engineering education stack, WhiteHatJr for school kids, Udemy for college kids and Stack Overflow for working professionals.”
@sparkcapital wrote: “Congratulations to the @stackoverflow team on joining forces with Prosus! Since 2011, we’ve been the proud partner with this team as they grew from the first Q&A site for developers into the number one place developers come to learn, share and build.”
According to a statement from Prosus, Stack Overflow was one of the 50 most popular websites in the world that served more than 100 million people across the world every month.
More that 85 percent of its learning-focused community visited the platform every week to access more than 52 million questions and answers. There was a new question asked on Stack Overflow every 14 seconds, and
developers and technologists visiting the platform had been helped 50+ billion times since its inception.
“Prosus can help accelerate Stack Overflow’s growth ambitions, with a particular focus on reaching a wider international community, while also further scaling the company’s Teams product to position Stack Overflow at the centre of product and technology development within major enterprises globally,” Prosus EdTech chief executive Larry Illg said.
Prosus aimed to reach 90 percent of the Fortune 100 across its corporate learning companies including Stack Overflow, Skillsoft, Udemy and Codecademy.
Illg said that with the skills shortages and ever-evolving needs within technology organisations, technology training had emerged as the largest and fastest growing segment of corporate learning and development.
“As an operator of businesses across more than 90 countries, we understand the needs of technologists and developers, particularly in high-growth markets. In addition to further scaling its community in the markets we know well, we want to help Stack Overflow teams to expand within enterprises to address an under-served opportunity to transform their technology learning and collaboration,” he said.
Prosus’s share price closed the day at R1 421.68 on the JSE yesterday.