Jumia’s listing on NYSE has been facing a lot of controversies from popular African techpreneurs like Rebecca Enchong — questioning their Africanisms and MTN Group — one of the major shareholders bidding to sell their stakes in the company.
Part of the filings Jumia sent to the US Securities and Exchange Commission (SEC), contained a report of the loss of over $1.1 million between 2017 and 2018 to cyber fraud and robbery. Citron Research, a short-seller, capitalized on this report to accuse Jumia of fraud. Citron made this accusation public in their 12-page PowerPoint Presentation report.
This report caused the fall of Jumia’s shares from $40 to as low as $18.13. In response to the allegations, Jumia revealed their first-quarter earnings. The announcement revealed that Jumia’s Q1 Gross Merchandise Volume (GMV) increased by 58%, leading to a 102% increase in Marketplace revenue, about £240 million. Their gross profit margin as a percentage of GMV increased from 5.6% in Q1 2018 to 6.5% in Q1 2019. Their JumiaPay partner Mastercard also made £50 million from its investment in Jumia.
Although Citron Research intentions regarding the attack on Jumia is obvious—considering that the company is a short-seller that always have an interest in driving down the shares of the company it targets, Jumia, its shareholders, and even banking partners have remained quiet over the issue.
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