- Jumia Drops 12.3% After Reaching Record High
Africa’s e-commerce giant, Jumia Technologies, has started declining following a successful Initial Public Offer.
The stock rose by 204 per cent from the $14.50 it was listed on the New York Stock Exchange to $43.5 a share in three days. Boosting its market capitalisation to $3.29 billion from slightly above $1 billion.
Since peaking at $49.77 a share on April 17, the stock has continued to drop, trimming its gains to $32.25 on April 18. Representing a decline of 13.15 per cent.
The ‘Amazon of Africa’ later pared losses to 12.3 per cent and traded at $35.15 per share. Bringing its market capitalisation to $2.68 billion.
A report by Euromonitor International showed African consumers account for a mere 1 per cent of Jumia’s online sales, while China accounts for 24 per cent of the company’s total online retail sales. Jumia, however, views this as an opportunity for growth in Africa as more people continue to embrace online shopping and smartphones on the continent.
Jumia revenue rose by 48 per cent in 2018 to $147 million, still low when compared to the company’s value but showed growth nevertheless. The company lost 170 million euro in 2018 alone.
Jumia posted 800 million euros in losses and still expecting outside investors to offset its negative cash flow.