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.