[STOCK] Prosus N.V. (PRX.AS) - Gold Medal For Worst Private Equity Deal JustEat #2025 - a Bayesian analysis [25% overvalued significantly].
Yummy, another food delivery service ready to be written down to a cemetery and let me tell you how this unbelievable stupid story unfolded...
Our Bayesian framework to value assets continues but got to a hold since we one of the the dumbest golden medal of #2025 PE/M&A deals where (stock) Prosus acquired (stock) JustEat a takeaway food firm for 4bn in cash at a 63% premium whilst the firm barely survived all those years.
Our Financial Bayesian editors wrote a book about this disaster, which hasn't ended yet - as this will end up in a case study booklet for university eventually.
If you do not own a kindle, you can buy through stripe the PDF of this hand grenade of stupidity. https://buy.stripe.com/3cs7tO1L568Q2AweV2
As of (today) March 25, 2025, Prosus N.V. is trading at €43.54 per share, with approximately 5.28 billion shares outstanding, which results in a market capitalization of about €108 billion. For U.S. investors, Prosus also trades as an American Depositary Receipt (ADR) under the ticker PROSY, with a price of $6.27 per share, corresponding to a market capitalization of $168.97 billion. And boy this stock is overvalued; you can like for like compare it if you understood the principles of Bayesian Inference, in our practitioner booklet:
If not a kindle; stripe link here for the pdf: https://buy.stripe.com/9AQ7tO2P9btafni6ot
Hold on mothertrucker, ‘W%F’ is a ‘Prosus?’.
Prosus NV engages in t(he provision of different technology platforms. It operates through the following segments: Ecommerce, Social and Internet Platforms, and Corporate. The Ecommerce segment operates internet platforms to provide various services and products, and includes classifieds, payments and fintech, food delivery, retail, travel, and other ecommerce.
Food delivery. That is our focus. Deliveroos, JustEat, Doordash, GrubHub, all nonsense low profit, low buffer, high running debt firms.
Food. Something people argue over, and is purely a 'NICE TO HAVE' - no where near an essential tool in our way of living.
Just eat it. Yes. Just eat it. And what happened to a company who never made a profit? Well a proven hypothesis that board is incompetent.
Let’s look at Just Eat, the delivery giant’s super profitability last 10 years that warrants a 63% whopping premium on it’s current record holding of never making a profit and strangulation of restaurant owners to put them under margin pressure. The EBIT figures for Just eat Speak for themselves.
Earnings Before Interest and Taxes (EBIT) - JUST EAT.NV
The people at Prosus must have thought for a firm which has struggled becoming profitable for >10 years, let's just random 63% offer them a cash settlement - I mean not profitable, low barriers to enter, worth a shit tonne of debt, let's just wing it. Yes, I do believe not a braincell was working there at Prosus.
Because in my view this is year to date the worst acquisition by Gold Medal Standards.
Prosus to acquire Just Eat Takeaway.com for €4.1bn – Prosus
63% premium over what is worth less than nothing. A delivery food service with super thin margins. This story has a long conclusion, but first let’s do our usual, subtract debt, subtract etfs, subtract a impairment charge as they basically bought 4bn in cash for a piece of paper worth $0.
If the deal falls through; this is a really important part why this could be the short of the year #2025;
Because if the deal falls through because this incompetent firm struggling with profitability for 10 years; will have to pay money they don't have if this M&A/PE deal falls through:
Bayesian goggles on DEBT + ETFs positions
Regarding exchange-traded funds (ETFs), Prosus N.V. is included in numerous ETFs globally. Specifically, it is a holding in 522 ETFs. Additionally, the American Depositary Receipt (ADR) of Prosus, trading under the ticker PROSY, is held by four ETFs.
The Dutch one alone is; https://www.justetf.com/en/stock-profiles/NL0013654783#etfs
Since it’s listed in >500 ETFs, the overall outstanding float share of 5 billion shares, over 500M shares in a partial picture of the ETF holdings represent ~9.58% of Prosus’s total shares. So if that would dissapear as we explained in the ‘the Bayesian Practitioner Valuation method” - it is fair to assume a moderate decline of around 10% with spill over effects in stocks correlated to it (DOORDASH, Deliveroo etc). If, as explained in previous models, an NLP with negative news and the news of ‘Prosus NV buying 63% premium over worth a bag of shit’- the interpretation is likely to be negative. Statistically as is described in the booklet around this case, you enter around a decline significance of around 10%.
Impairment Charge and Impact:
If Prosus were to undertake a $4 billion impairment charge (aka, it turned out to be a wrong deal and the firm goes bankrupt and they have to write it off), Bayesian inference suggests a potential market value reduction. Based on past market reactions, impairments typically lead to a 1.5× impact on the company's valuation, causing an estimated market capitalization decline of 3.57%, reducing it to $162 billion from the prior $168 billion at the bare minimum (without NLP sentiment, without being dropped out of ETFs, without any spillovers which will 100% happen). In this case binary, not percentile. Frequentist maths is at the end nothing else but also a equal handy tool next to and together with Bayesian maths.
ETF Sell-Off Scenario:
If 50% of ETFs were to sell their 500 million shares of Prosus (representing 9.58% of total shares), the market could face additional downward pressure. Empirical studies suggest that large ETF sell-offs can cause a 3–8% decline when less than 10% of the float is sold. In this scenario, a 7% decline would likely follow, resulting in a new market cap of approximately $74.3 billion, a total decline of 25.7% from the initial market cap of $100 billion.
Market Cap: As of March 25, 2025, €108 billion or $168.97 billion.
Debt: Total debt of $16.23 billion.
ETF Sell-Off and Impairment charge and negative NLP sentiment: All combined, together with a 50% ETF sell-off, could further reduce market cap to $74.3 billion, representing a 25.7% decline (which is statistically significant) - for further checks the booklet will do.
On top; Prosus N.V. is actually held by Dutch Pension funds (PFZW) of which earlier today I actually send an email too about breach of policy to the Dutch, UK and European Regulator.
On top; you can see the holdings of henceforth dead zombies walking pension fund here:
Overzicht aandelen - Over PFZW | PFZW
And I suddenly realized one of the largest pension funds in the Netherlands for a large group of retired people, their pension is f%cked with the most horrifying investments. And then people wonder why ‘life is so expensive’, ‘my pension is so little’, etc. Be a man, grab it by the balls and complain constructively. Because I’ve had tirades at Pirelli stock versus Michelin and a ‘Dutch Pension Fund for the elderly’ has investment in Pirelli.
Our editorial team wrote a book about it; and we will continue this as a ‘case study’ towards universities as ‘this is now how private equity or M&A should be done’
In all fairness I do think the group board at Just Eat is thinking and shivering with their butt cheeks (OMG (!!!!!!!!!!)) - someone is willing to pay a 63% premium on a firm which always struggled to make a profit, in net cash, not even a debt structured deal. For them santa came home early.
Be wiser, be critical, Prosus is currently statistically significant overvalued by more or less >25%.
For further reading material; our editorial team is trying to rewrite the old school dinosaur bankers methodology in ‘what a BSc Finance’ should have been in the first place. Give it a try, if you wanna learn.
Our Bayesian Editorial team working in conjunction with banks and universities with us old school finance boys feeding them info.
We are currently already in talks with the financial regulator, with the pension funds and setting up a case study of ‘how to shit cash faster than you can eat’ - aka a case book study for universities which we will provide as this is seriously a really undesirable event.
So expect a much larger case study book on M&A and PE (Ross has worked for both as many of his friends at this subreddit, including the top M&A deals in the end 90s) - and even those made more sense than this one.
Speak soon.
In this case, greed is good. Because stupidity of this magnitude should be penalized.