Jumia Bleeds Over “Improper” Transactions

Jumia Bleeds Over “Improper” Transactions
Bloomberg reports that Jumia has uncovered some improper transactions which inflated its sales: “Jumia Technologies AG has identified improper transactions at the Africa-focused online retailer’s Nigeria business that amounted to as much as 4% of first-quarter sales.” This is exactly what the short-seller, Citron Research, noted in its bombshell report which has partly derailed Jumia post-IPO performance.

While the Berlin-based company says it’s taking measures to cut out instances of wrongdong, the findings backed up warnings made by short-sellers Citron in a report three months ago, which brought an abrupt end to a share-price rally following Jumia’s initial public offering in New York the previous month.

Jumia found cases where “improper orders were placed and subsequently canceled,” the company said in a statement on Wednesday. These included deals made through a team of independent Nigerian sales consultants called J-Force. The transactions in question amounted to 2% of 2018 gross merchandise volume — a term for sales used in online retailing — rising to 4% in the first quarter of 2019.

Meanwhile, Jumia reported that its “second-quarter operating losses widened by 60% to 66.7 million euros ($74 million), mainly due to an increase in costs related to the vesting of share options following the IPO”.

The news and the quarterly performance dragged the stock further down; it is losing 16% this morning.

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4 thoughts on “Jumia Bleeds Over “Improper” Transactions

  1. Jumia is still tintinnabulating, and engaging in grammatical acrobatics…

    It asked everyone out there to become JForce member, and also failed to use the appropriate tools to monitor and measure what goes on on its platform daily? This euphemistic embellishment termed ‘improper transaction’ has a better name, and they know it!

    We never said it would be easy out there, but Jumia is now doing…

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