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In May 2019, Citron Research, one of the longest-running online stock commentary websites with a proven track record in identifying fraud and terminal business models, released an overwhelming report on Jumia Technologies, an e-commerce company based in in Berlin operating in Africa. In the highly discredited report, Andrew Left, the founder of the research firm and professional short seller, raised a number of allegations against Africa’s leading ecommerce platform, which included financial discrepancies, fraudulent orders and corporate inefficiencies.

Additionally, just weeks after Jumia’s first quarter reports were released in August 2020, Left released another report that questioned the information presented in Jumia’s prospectus published on the New York Stock Exchange (NYSE) and asked the SEC to remove Jumia’s actions. These negative reports dealt a severe blow to the company’s once promising outlook: Jumia’s share price, which fell from $ 14.50 per share to $ 50 weeks after placement, plummeted by more than half to $ 21. ; investors became agitated and threatened collective lawsuits against Jumia; employees fidgeted because they didn’t know what to believe; and brand partners and sellers on Jumia have begun to collect their merchandise from the platform.

The performance of the company’s shares continued this downward trend throughout the financial year, trading as low as $ 2.15 per share at the end of trading on March 18, 2020. This situation seemed to justify Andrew Left and his fellow Citron. Research, as well as other opponents of Jumia’s business prospects. What these opponents of Jumia’s operations have in common is a far from complete appreciation of the Jumia market. Their analysis of the company largely came from information gleaned from the European and American markets.

One thing to note here is that, while these offshore analysts have seen their fate, due to their inapplicable data, Jumia’s management, led by Jeremy Hodara and Sacha Poignonnec, armed with superior data from the African market: huge population, youth composition, Internet penetration growth, etc. – saw good prospects for Jumia’s business. Despite the negative reports and challenges they posed to the company, Jumia’s executives were undaunted and tenaciously focused on their business model. When it seemed the worst was yet to come, their tenacity and business acumen began to pay off. The downward descent in the share price not only stopped but went into reverse, climbing to $ 18.03 per share at the end of trading on October 26, 2020, up 17% over the past five days and by over 165% per year. to date.

The new corporate reality of the company reached the opponents, who were all waiting for a tragic news regarding the company, as a huge shock. Aside from the rebound in the share price, the company is posting positive results in almost all performance indices in the year 2020. In the 3 quarter financial results released on November 10, 2020, Jumia’s gross profit is was € 23.2 million ($ 27.3 million), a year-over-year increase of 22 percent. Jumia’s gross profit after compliance charges reached € 6.6 million, compared to a loss of € 1.7 million in Q3 2019, marking the first time the Jumia Group has achieved a gross profit after fulfillment and advertising costs.

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The number of active consumers on its platform each year was 6.7 million, up 23% year-over-year. However, orders dropped to 6.6 million, down 5% year-over-year due to a 20% decrease in digital service transactions on the JumiaPay app, while orders on the rest of the platform remained stable. Jumia’s payment platform, JumiaPay, continued its stellar growth with a total payment value of € 48 million, a 50 percent increase year over year.

Explaining Q3 2020 performance, Jumia management said: “We are making significant progress on our path to profitability with the loss of Adjusted EBITDA in Q3 2020 down 50% year-over-year. The significant progress achieved was mainly attributable to the in-depth work we have done on the foundations of our business, with limited support from external factors such as COVID-19. “

These current realities have forced Citron Research to move from bearish to bullish on Jumia Technologies, citing Jumia’s change in its business which has seen greater adoption of e-commerce service provision due to the pandemic. This adoption, according to Citron Research, is helping Jumia Technologies achieve profitability in the emerging African market.


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According to its report, Citron Research says Jumia Technologies is the only full-scale e-commerce operator in Africa, shipping around 20 million packages annually to cities and rural areas in eleven countries on the continent. “Jumia’s positioning in Africa alone (ie Logistics, Technology, Employees, Brand) should be worth at least $ 7 billion or $ 100 per share.”

Citing Africa’s 1.3 billion population with over 520 million internet users, Citron said: “Either these young Nigerians, who make up up to 60% of the entire population, will be the first people on earth not to accept e-commerce or the stock will go up to $ 100.” The report reinforced this stance by citing Stripe CEO Patrick Collison, who said “there are tremendous opportunities. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow by around 30% every year. “

The Citron Report also contemplated that, with the current corporate reality of Jumia Technologies, Alibaba and Softbank as companies they may be interested in becoming a strategic partner or investor in Jumia in order to provide a “direct channel for Chinese goods in the African market. “

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