08 Feb 2018 #TradeMyWay: Tim O’Hagan
As part of our #TradeMyWay campaign, we have asked users to send in some of their own personal trading stories. Thank you to Tim O’Hagan for sharing his story with us below.
Three and a half thousand Naspers share options were my reward for being appointed Assistant Editor of YOU magazine. At R20 a share that sounded like a great deal, one that amounted to R70,000. Struggling to pay off a bond, support a family of five and deal with financial demands, I regarded this allocation by senior management as a generous gesture. My experience as an options trader and the company’s upside momentum left me in no doubt that the share price would grow. And grow it did. I can’t remember the exact time frame, but it was when Naspers was making a deal with a Chinese company called Tencent in 2001. Little did I know then that Tencent would become the Facebook of China, that the share price would go into the stratosphere, and that it would make millionaires and billionaires out of men and women from Kraaifontein. Within a short time of being allocated these options, all of which I took up, Naspers shares started to climb… from R20 to R25, from R25 to R30, and then, unbelievably, from R30 to R40 a share. I had made R70,000 without forking out a cent! The profit was well timed – one of my daughters needed a car. I remember the car well; it was a brand-new Opel going for R89,000, and I knew my daughter would love it. So I sold my share options and bought her the car.
The meteoric rise of Naspers (which morphed into Media24) was probably one of the most staggering and rapid ascents of any share in the history of the Johannesburg Stock Exchange. The extraordinary part of it all was that it all started without fanfare when some very insightful Naspers board members perceived an opportunity in the Chinese market and bought an Internet company called Tencent for $32 million in 2001. None of us hacks working at Naspers then had any idea that, in time, Tencent would become the most valuable company in China, and that Naspers’ 34% stake in the company would grow its market capitalization to $757 billion. Incredibly, thanks to some astute bargaining by the then CEO of Naspers, Koos Bekker, Naspers had pulled off one of the deals of the century, ending up as a one-third owner of the fourth-largest Internet company in the world after Amazon, Google and Facebook (Tencent’s market cap is R4.7 trillion). What happened to Naspers shares after that? For the first year or so after I had sold my shares, I was pretty much out of the picture, having served time in Chris Barnard Memorial for a heart bypass, and learning to come to terms with my new status of an unemployed medically boarded employee.
But when I got out of hospital, I noticed a sea-change in the value of Naspers shares. And as I trudged around the world – Mount Kilimanjaro, Mount Everest Base Camp, an ashram in India – I watched spellbound as the share skyrocketed. On July 10, 2017, the share rose to an all-time high on the JSE, trading at R2,860 a share. But more was to come; by November 2017 the share price had risen to above R4,000 a share.
So, I am still paying off the bond. I have doctors’ accounts to pay and face daily demands to account for a TV licence when I don’t own a TV. Had the stars been shining on me in a different galaxy, my shares today would have been worth R14 million. But hey, my lovely daughter got a car, she knows how to drive, and you can’t put price on the smile in your daughter’s eyes…
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