There are indications that Africa’s first unicorn, Jumia Technologies is having a bullish time as its shares value has been rising trading above 10% after a prominent investor best known for going short said the African e-commerce company’s stock is poised to go higher after a great holiday season. Jumia, a Franco-German company that provides e-commerce sales and services in a number of African countries, has been a battleground stock for the better part of a couple years. Bulls marvel at the potential of Jumia becoming the Amazon of Africa even though one of its top executives maintain that they are Jumia, not Amazon, while bears worry about the logistical and other hurdles it faces trying to get there.
Jumia in 2019 was a target of short seller Citron Research, which called it an “obvious fraud.” With the stock both up 500% in the last 12 months, and still largely unchanged from its early trading daysm,Citron has since had a change of heart concerning the company, reiterating its bullish stance. The investment firm on Wednesday tweeted that the stock is likely to double from here. Citron bets that Jumia, which currently trades at about $44.50 apiece, is “on its way to $100,” according to Citron, which called it the “largest opportunity in e-commerce.”
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Citron attached a Jumia graphic highlighting business milestones in 2020, including the site’s record 113 million visits on Black Friday 2020 and a 55% jump in transactions on Jumia’s payment platform compared to Black Friday 2019. The firm said the Black Friday success “validated” Jumia’s opportunity, and should bode well for the company’s future.
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Investors should note that Jumia remains an early stage company with a lot to prove and a lofty valuation. This company isn’t yet the slam dunk success story that Amazon is, or that MercadoLibre is becoming in Latin America.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry