Following a damning report by US-based Citron Research, shares of Jumia Technologies crumbled by 18% in the seven hours of trading on Thursday.
Citron Research, an online investment newsletter headed by Andrew Left, accused Jumia of inflating the number of its active merchants and customers.
Citron said it received a copy of the Confidential Investor Presentation Jumia sent to investors in October 2018 and claims that the information contained therein is different from what was presented to the US Securities and Exchange Commission in April.
The firm said Jumia reported a rise in active consumer numbers from 2.1 million in October investor presentation to 2.7 million by April while active merchants moved to 53,000 from 43,000 during the same period.
“The most disturbing disclosure that Jumia removed from its F-1 filing was that 41% of orders were returned, not delivered, or cancelled. This was previously disclosed in the Company’s October 2018 confidential investor presentation,” the report read.
“Instead, Jumia disclosed that “orders accounting for 14.4% of our GMV were either failed deliveries or returned by our consumers” in 2018.
“Assuming 41% of orders were returned, not delivered, or cancelled in 2018, this implies that almost 30% of orders were cancelled in 2018.
“Since Jumia primarily sells consumer electronics, which should not have this high of a cancellation rate, it wreaks of fraud.”