Facebook lifts Naspers to record highs

Listed media and internet heavyweight Naspers has again reached record highs on the JSE in recent sessions, on the back of a resurgent Facebook.

Naspers ended Tuesday (30 July) at a record price of R830 and an intraday best of R836.71, valuing the company at around R350 billion.

Shares in Naspers have gained R379.79 or 84.4% over the past year, and 374% over the past five years. On Wednesday, the group was flat in midday trade on the local bourse.

Online social network giant Facebook, meanwhile, ended within a whisker of its listing price of $38 on Tuesday on the Nasdaq, at $37.63.

The social network closed up $2.20 or 6.2% having recently published financial results that have re-ignited the market’s love affair with the group. It has a market cap of $90.72 billion.

Mark Zuckerberg‘s creation has climbed more than 40% in the past week after it reported impressive quarterly results highlighting its progress in mobile advertising.

The social network, with 1.15 billion users, hit a peak share price of $45 shortly after its listing on the Nasdaq, before slipping and closing trade at $38.23. Since then, the share price has not come close to trading at that value.

Naspers CEO Koos Bekker initially expressed his misgivings over the future of Facebook, in Novemeber. He said that Naspers would look to get rid of its remaining shares in Facebook as soon as it was able, having already sold two-thirds for a book profit of R1.5 billion through Mail.ru.

Naspers is a minority shareholder with a 29% stake in the Russian firm, Mail.ru which still still holds 14.2 million shares in Facebook.

“Any future disposals would be a decision for the Mail.ru board to make and we cannot comment or speculate on that,” a spokesperson for Naspers told BusinessTech.

Koos Bekker
Koos Bekker

In an interview with Moneyweb late last year, Bekker said: “We ended up with a stake in Facebook [through Mail.Ru] when the company was listed – and the bankers are, of course, clever enough to limit you.”

According to Bekker, Naspers was able to sell one third of its stake in Facebook when it listed – with a company value of $100 billion.

“Then we sold one third recently, at about half that price – and then we still hold one third, which we’re not allowed to sell until next year,” Bekker said.

“So, regrettably, they stagger you – but we made a nice fat profit,” he said of the R1.5 billion amount. Despite not being a direct shareholder in the social network, Bekker cast doubt over Facebook’s true value, pointing out the company’s drop in market capitalisation since its IPO.

“The interesting question is what is Facebook worth? It started at $100 billion, dropped to slightly below $50 billion but it’s clearly a vigorous company so it may belt up,” Bekker said.

Bekker has 16.4-million shares in the South African media company – worth over R13.6 billion were he to cash out at the current share value (R829.69 as of Wednesday 31 July 2013).

Bekker does not take a salary from Naspers and is instead paid in company stock. In the last financial year, he was paid 3.9 million shares worth R3.1 billion.

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Facebook lifts Naspers to record highs