What Prosus and Lesaka tell us about the JSE's platform future

The tale of two platform businesses on a stock exchange that's not exactly crowded by these tech companies

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There are many examples of platform businesses in the US market, ranging from the “magnificent seven” giants like Apple and Meta to “smaller” technology plays that are still massive by any rational standard.

Locally, the only company that comes close to being in this position is Prosus. (I’m only going to refer to Prosus instead of Prosus-Naspers as it’s clear that the group is focusing on the Prosus brand.) This focus is apparent in the share price, with Prosus up 61% year to date, while Naspers is up 48%.

There’s no chance that the modest underlying difference in assets can explain the difference - it’s really about the storytelling on the global market, with all the energy being put into the growth story at Prosus and its international portfolio of assets.

Thanks to Tencent and its regular dividends, the debate isn’t about whether Prosus will run out of cash or need to raise funds from investors. Rather, the discussions centre on whether Prosus has good enough investment opportunities in underlying assets versus the opportunity to repurchase its own shares.

Management talks about moving from “Tencent minus” to “Tencent plus” — a clear recognition of how the market has historically valued the non-Tencent assets at a discount because of concerns about how capital was being allocated.