Jumia a Fraud? Barely a month after its celebrated listing on the New York Stock Exchange, Nigerian e-commerce company Jumia Technologies, in which MTN has a 30% stake, has been called an “obvious fraud’.
The comments were made in a report released last week by US short-seller Citron Research. Citron adds that “worse than being ‘the most expensive’ US listed e-commerce company, Jumia financials show a stagnant business that has burned through $1-billion and has moved the suckers’ game to the US Markets”.
Jumia was founded in 2012 by former McKinsey & Company consultants and was initially known as Kasuwa, which means “Market” in Hausa, a language spoken between 40- and 50-million people in West Africa. The business was initially funded by German venture capital firm, Rocket Internet but later MTN and Millicom, among others, bought into the founders’ vision of creating an African version of Amazon.
According to reports, the flotation on the New York Stock Exchange had the potential to raise about $196m (£150m) for shareholders and for future investment. These shares were being pitched to investors at between $13-$16 each.
According to news from the BUSINESS MAVERICK Jumia still incurs losses in its seven years of existence. Though this is typical for Tech start-ups,
“scaling up and growing market share is foremost to achieving profitability over the long term”, says Sinesipho Maninjwa, a CA and a financial news commentator.
However there are claims from the Citron Research , that Jumia fudged its figures to get listed. A statement which was backed by a full report, which according to Citron brings out enough discrepancies to warrant more investigation.
Exposing the SMOKING GUN and show why the equity is WORTHLESSCitron Research
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With controversy sparked by this issue, everyone has his/her opinion on the matter. one of such is:
Every business has its struggles. Most of the ill talk is in a bid to squash Jumia which has established herself as a powerful competitor in Africa and the global stage. I also believe that all these allegations are not credible.
The best way to compete is by building something better, rather than trying to blackmail what is taking over the market.by Mokate Ashu – Silicon Mountain
Tell us what you think in the comments below.
Sources: BUSINESS MAVERIC, Citron Research