BUY: Goldrush
Goldrush was in the press in 2025 after emerging as a major participant in the Sizekhaya consortium, which was awarded the licence to be the next national lottery operator. As is often the case with lottery awards, litigation quickly followed. However, late last year the courts dismissed Ithuba’s application to urgently interdict the implementation of the award. With the review application now likely to be heard only later this year, and the licence commencing on June 1, the probability of the award being set aside appears meaningfully reduced. While detailed financials have not been disclosed, court documents from prior arbitration between Ithuba and Hosken Consolidated Investments (HCI) point to the lottery operator’s significant profitability. Ithuba repaid more than R400m of financing from HCI just over a year after its licence commenced.
Though the national lottery is a mature business and has faced increased competition from online gambling, regulatory action against betting on lottery outcomes and the return of scratch cards should support ongoing profitability. Astoria’s recent unbundling of its Goldrush stake should improve liquidity and may result in price-insensitive selling. Despite Goldrush’s 24% exposure to Sizekhaya, the share price appears to ascribe little value to the lottery licence — a view seemingly shared by insiders, based on recent director dealings.
(Disclosure: the fund managed by Cheesman is hosted under the licence of Goldrush Holdings’ fund manager and also holds shares in the company.)
SELL: Optasia
The stock market maxim of caveat emptor is rarely more relevant than in the case of a new listing. Knowledgeable insiders tend to sell at rich valuations when conditions are as favourable as possible. With close to R500m in IPO expenses and enthusiasm around FirstRand acquiring a 20% stake ahead of the listing, Optasia’s IPO was a resounding success. The company listed at the top of its pricing range, enabling insiders to cash out more than R10bn. Optasia describes itself as a “leading AI-led platform unlocking unprecedented opportunities in digital finance”. In practice, the group facilitates small, short-term loans via mobile phones, operating primarily in emerging and higher-risk markets.
During the prior financial year, its largest microfinance geographies were Pakistan and the Democratic Republic of Congo. Optasia earns a take rate of roughly 5% on amounts advanced and has historically reported bad debts of only 1%, a figure that may prove optimistic following rapid growth. While near-term growth is likely to remain strong, additional insider selling is expected once the lockup period expires. Investors should also monitor ongoing litigation in Iraq and Nigeria, as well as the company’s tax structure. On a demanding valuation, there is little margin for execution missteps.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.