Dutch e-commerce company Prosus expects to write off its $769M, 27% stake in Russian social network VK, and asks its directors on VK's board to resign
Context & Ripple Effects
The VK write-off is the accounting endpoint of a retreat Prosus began signaling months earlier: in May 2022 it announced plans to exit Russia entirely and sell classifieds business Avito, and by October it had agreed to sell Avito to Kismet Capital for roughly $2.46B — against analyst valuations near $6B before the invasion. Writing off the $769M, 27% VK stake and pulling its directors off the board converts an unsellable position into a clean loss.
The move lands amid broader retrenchment: Prosus and parent Naspers have since moved to cut 30% of their corporate workforce citing a tougher macro environment, while the company says it wants to expand in Europe, India, and Latin America instead.
First-order effects
- Prosus takes a $769M hit on paper and loses board-level influence over one of Russia's largest social platforms, with its directors asked to resign from VK's board.
- VK loses a major international shareholder and whatever governance bridge that stake provided to Western capital markets.
Second-order effects
- The Avito sale price versus its pre-war valuation sets the discount benchmark for other Western holders of Russian internet assets, pressuring any remaining ones to mark down or exit rather than wait.
- VK's consolidation continues on the domestic side — Yandex's swap of its news aggregator for Delivery Club folds more assets into VK even as foreign investors like Prosus head for the exits.
Third-order effects
- If the pattern holds, Western-listed tech groups unwind Russian positions through fire-sale disposals and write-offs rather than negotiated exits, with local buyers capturing assets at steep discounts.
- Prosus's stated pivot toward Europe, India, and Latin America suggests the Russia episode accelerates a structural reweighting of its portfolio away from markets where governance risk can strand stakes outright.
The trend: Western tech investors are systematically writing down or selling off Russian digital assets at deep discounts, redirecting capital toward markets they judge governable.