Jonathan Jawno's Transaction Capital faces $1.1 billion market cap plunge in 2023

Transaction Capital, the South African financial services group co-founded by multimillionaire businessman Jonathan Jawno, has suffered a substantial $1.1-billion slump in its market capitalization since the start of the year.

The company’s market value decline comes as investors continue to offload shares following a significant hit to its profit.

The non-deposit financial services company, which operates in South Africa and Australia, made the decision to forgo dividends in light of a significant R2.1 billion ($112.5 million) headline loss in its SA Taxi business during the six-month period ending on March 31, 2023.

During the first half of the year, Transaction Capital’s core earnings experienced a notable 46 percent decline to R353 million ($18.92 million), compared to R648 million ($34.7 million) in 2022. This significant drop in earnings is expected to impact the group’s full-year results.

As a result of investors’ reaction to the financial results, its share price has plummeted by more than 82 percent since the beginning of the year, falling from R33.1 ($1.78) on Jan. 1 to R5.86 ($0.32) at the time of drafting.

Consequently, Transaction Capital’s market capitalization has declined by R20.79 billion ($1.12 billion), dropping from R25.26 billion ($1.36 billion) at the start of the year to R4.47 billion ($240.47 million) at the time of drafting this report.

Jawno, a founding member and executive director of Transaction Capital since March 2003, has seen the market value of his equity holdings plummet due to the double-digit slump in the group’s shares.

Jawno owns a significant 9.59-percent stake in the investment holding, equivalent to 72,667,000 ordinary shares. His stake, once valued at R2.4 billion ($129.31 million) on Jan. 1, has dwindled to R425.83 million ($22.9 million) at the time of drafting this report.