Leidi.com Rakuten September 18
Tencent's major shareholders Naspers and Prosus announced today that Bob van Dijk will resign as CEO and board member after ten years of leadership at Naspers and Prosus.
Current group chief investment officer Ervin Tu has been appointed interim CEO. Bob van Dijk will assist with this transition and will continue to serve as an advisor to the Board until September 30, 2024.
Koos Bekker, Chairman of the Board of Directors of Naspers and Prosus, said, “The Prosus and Naspers Boards would like to thank Bob for his leadership throughout a decade during which we established a strong presence in classifieds, food delivery and payments. A significant amount of business, and we have also entered several new areas. We thank Bob for his contributions and wish him success in his future career."
Naspers and Prosus said Ervin Tu's appointment as interim chief executive would provide a seamless transition. As Chief Investment Officer, he makes a significant contribution to the strategic direction of the company and will provide continuity in the execution of the group’s key priorities. This includes enabling the company's integrated e-commerce portfolio to be profitable while maintaining growth, and leading capital allocation across the group.
Ervin Tu said, "Prosus' operations have strong momentum. I am honored to take on this role and help shape the future of the group. I am very excited about the team around me and the start."
It is reported that Prosus is a holding company used to hold the international Internet assets of the South African investment company Naspers, which was spun off by Naspers.
Similar to the dilemma faced by Yahoo after investing in Alibaba, the value of Naspers' Tencent equity holdings has always exceeded Naspers' own value. Naspers' motivation for spinning off Prosus is to narrow the value gap.
In September 2019, Prosus was listed in Europe and immediately became the first Internet giant in Europe with a market value of more than 100 billion US dollars.
Before the establishment of Prosus, Naspers sold 189,978,300 Tencent shares in 2018 for a total price of HK$76.94 billion, accounting for approximately 2% of Tencent's issued shares. After the sale, Naspers still held 2,961,223,600 shares, accounting for approximately 31.17% of the issued shares.
At that time, Tencent CEO Ma Huateng also expressed his position, saying that the South African major shareholder has supported Tencent for 17 years. Tencent's major shareholder only sold a small amount and immediately promised not to sell again for three years. Such shareholders are hard to find.
However, after listing, Prosus changed Naspers' past style.
In the past two years, Prosus has reduced its holdings in Tencent three times on a large scale, reducing its holdings by 192 million shares in April 2021, 76.76 million shares in September 2022, and 103 million shares in December 2022.
Different from before, Prosus's holding reduction method after entering 2022 is to continue to reduce its holdings in small amounts. The average number of Tencent shares sold every day will not exceed 3-5% of Tencent's average daily trading volume.
Since 2023, Prosus has continued to reduce its holdings of Tencent shares. By April 2023, Prosus' shareholding had dropped to 26%. Prosus said it expects its Tencent holdings to shrink by 2 to 3 percentage points each year as repurchases continue, with Tencent's shareholdings expected to drop by approximately 24% to 25% by the end of 2023.
During the same period, on August 17, 2023, Tencent's awards to employee participants under the terms of the share award plan involved 44.385 million award shares, accounting for approximately 0.4645% of Tencent's total issued shares.
Based on Tencent's closing price of HK$332.8 that day, the value of this equity is as high as HK$14.77 billion. By August 2023, Tencent has issued and granted bonus shares up to 90.6 million shares this year, which has significantly exceeded the 54.19 million shares given away in 2022, corresponding to employee incentives of at least HK$30 billion.
The reduction of major shareholders' holdings, coupled with Tencent's own additional issuance, has caused Tencent's stock price to continue to fall. As of today's close, Tencent's share price has fallen to HK$312.2, and its market value has fallen below HK$3 trillion.
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