COPENHAGEN, Denmark--(BUSINESS WIRE)--Kold Investments, a long-term oriented investment firm and shareholder of Prosus N.V. (\u201cProsus\u201d) (AEX: PRX, JSE: PRX), today published \u201cThe Prosus Emperor\u2019s New AI Clothes,\u201d an open letter in the form of a fairy tale addressed to the Board of Directors of Prosus.<\/p>
\nThe tale may be read here: http:\/\/the-prx-emperor.com<\/a><\/p> \nKold 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.<\/p> \nInstead, Prosus appears to be pursuing what we regard as a self-deceptive strategic miscalculation of becoming a centralized global \u201ctech company.\u201d 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\u2019s asset base.<\/p> \n\u201cThe owners of Prosus care about the lowest-risk path to maximizing NAV per share,\u201d said Simon Kold. \u201cIn 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.\u201d<\/p> \nWhile this recent path may be personally exciting to management, we believe it is directly opposed to the interests of Prosus\u2019s 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 \u201ctech company.\u201d<\/p> \nThe recent developments at Prosus are captured in the fairy tale through an Emperor who wants so badly to be a \u201cOne Tech Company CEO\u201d that he dresses himself in \u201cAI clothes\u201d and orders work to begin on an LCM, short for a Large Catapult of Mistakedirection, so that \u201cthe 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.\u201d<\/p> \nAlong 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\u2019s 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.<\/p> \nKold 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.<\/p> \nThis 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.<\/p> \nPlease read the full disclaimer at http:\/\/the-prx-emperor.com<\/a><\/p>