July was a really bad month for Jumia. But if it reports great numbers in two weeks, during its quarterly earning, everything will be fine. The ecommerce company lost about 36% of its value in July. It has now fallen below its IPO base number of $14.50 (see image below for the current closing number, $12.35).
Jumia Technologies had its initial public offering in April, pricing its stock at $14.50 per share. Shares reached just shy of $47 per share at the beginning of May , but coverage published by Citron Research’s Andrew Left kicked off a steep decline for the stock and a wave of short-selling. The stock has now dipped below its IPO price and is trading in the $13.50 range — valuing the company at roughly $1 billion.
Jumia baptized itself as “Africa’s first”; so, we are watching how it plays out as it will become a baseline for assessing future African tech firms that would dream to be in the big board.
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Jumia’s fight is not just against flesh and blood, but also principalities and powers (led by short sellers), a highly sophisticated asymmetric war, with jury still out there with respect to Jumia’s weapon stockpiles. It’s still colder out there…
Jumia is in loss-making sector, so the usual saving grace is great PR laced with favourable press, and if you are not enjoying that, you keep taking blows from different directions.
Of course we cannot allow Jumia to hang its bad performance on the big board round our neck, by claiming to be African company, we need a new narrative to counter such labelling at every turn.
The honeymoon is over for Jumia, it simply needs to craft a new narrative, throw up some new stuff; you cannot be quiet for too long, the noise and shout must be continuous, until the valuation moves far north.
“The honeymoon is over”. That would be scary. It can move it below $10. Aug 21 the next call will decide the short-term future of Jumia. If they do well, they will inhale better; otherwise, coming to NSE (Nigeria Stock Exchange) where market news does not move equities may be an option