African unicorn: Sagarthama Technologies-THE SOUTH AFRICAN INVESTOR

THE SOUTH AFRICAN INVESTOR

African unicorn: Sagarmatha Technologies

"All assets should be valued based on what they produce."
Loot-logo-big
By Japhta Mamalema
 

In 2018 Sagarmatha Technologies tried and failed to list on the JSE.

Sagarmatha’s assets included the online store "Loot, Video360 and Independent media".

The company was valued at between R46-51 billion by Redwood Valuation Partners.


From its prelisting statement (see extract below):

 Sagarmatha’s businesses were losing money and their highest recorded operating profit was R129 million in 2014.

Table: Sagarmatha Technologies revenue and operating profit history
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I find it hard to justify a valuation of R46 for a company with recent annual sales of R1.9 billion and operating losses of R23 million.

I was taught to value things based on what they produce and Sagarmatha ain't producing much at the moment.
I am not saying that the company has no value,
I just find it hard to value.

But then again, I am not even a 4th rate analyst :)