Kold Investments, a long-term oriented investment firm and shareholder of Prosus N.V. ("Prosus") (AEX: PRX, JSE: PRX), today published "The Prosus Emperor's New AI Clothes," an open letter in the form of a fairy tale addressed to the Board of Directors of Prosus.
The tale may be read here: http://the-prx-emperor.com
Kold Investments believes Prosus has a straightforward, low-risk way to maximize long-term net asset value per share: maximize NAV-per-share accretive buybacks, while embracing the obvious economic reality that Prosus is a decentralized holding company whose value is primarily made up of its Tencent stake.
Instead, Prosus appears to be pursuing what we regard as a self-deceptive strategic miscalculation of becoming a centralized global "tech company." In our view, management is attempting to reshape a collection of unrelated and economically secondary businesses around a corporate identity that, in our view, does not reflect the economic reality of Prosus's asset base.
"The owners of Prosus care about the lowest-risk path to maximizing NAV per share," said Simon Kold. "In our view, that means accepting what Prosus is, continuing to arbitrage the NAV discount through maximum buybacks, letting decentralized businesses remain decentralized, and not dressing a Tencent-dominated holding company in the costume of something it is not."
While this recent path may be personally exciting to management, we believe it is directly opposed to the interests of Prosus's owners, who should care about the maximization of NAV per share at the minimum possible risk, not about dressing a holding company in the costume of a centralized global "tech company."
The recent developments at Prosus are captured in the fairy tale through an Emperor who wants so badly to be a "One Tech Company CEO" that he dresses himself in "AI clothes" and orders work to begin on an LCM, short for a Large Catapult of Mistakedirection, so that "the land of fish shall catch its fish with mining shovels, the land of timber shall fell its trees with fishing nets, and the land of iron shall mine its iron with saws."
Along the way, the royal treasury is instructed to slow down the NAV-per-share accretive buybacks to pay for the LCM and the reshaping of the lands to fit the motif of the Emperor's AI robe, while, in our view, the Courtiers admire the cloth rather than ask whether any of this really serves the townspeople owners of Prosus.
Kold Investments believes Prosus shareholders should read the tale and decide for themselves whether the robe is made from AI yarn, or whether it is made out of whole cloth.
This press release is not intended to constitute or contain an investment recommendation. Kold Investments does not possess or rely on inside information in publishing these materials. It is not a solicitation of proxies, votes, consents or other support in connection with any general meeting, shareholder resolution, board election or other corporate action. Kold Investments, through its affiliate, currently owns shares of Prosus and may change its position at any time. Kold Investments and/or its affiliated investment vehicle may from time to time buy, sell, increase, decrease, hedge or otherwise change their positions in Prosus, Naspers or related securities or financial instruments, without notice and for any reason, except to the extent required by applicable law or regulation.
Please read the full disclaimer at http://the-prx-emperor.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20260622769615/en/
Contacts:
Media Contact:
Simon Kold
media@koldinvestments.dk
+4520800407
