Shares of Jumia Technologies (JMIA) are sliding after Citron Research said that it has “never seen such an obvious fraud as Jumia.” Calling the stock “worthless,” Citron added that investors should not rely on reported numbers and a “restatement of financials is on the horizon.” ‘OBVIOUS FRAUD’: In a report published on its website, Andrew Left’s Citron Research said that in 18 years of publishing it has “never seen such an obvious fraud as Jumia.” “Worse than being the most expensive U.S. listed ecommerce company, Jumia reported financials show us a stagnant business that has burned through $1B and has moved the suckers game to the U.S. Markets,” the report reads. Calling the equity “worthless,” Citron warned investors to not rely on reported numbers and predicted that a “restatement of financials is on the horizon.” CONFIDENTIAL INVESTOR PRESENTATION: Citron said it has obtained a copy of Jumia’s confidential investor presentation from October 2018 that was being used to market to investors late last year and “is NOT what they told the SEC,” with many “material discrepancies” in reported key financial metrics when comparing the document with Jumia’s F-1 filing from last month. “In order to raise more money from investors, Jumia inflated its active consumers and active merchants figures by 20%-30%. 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. This number is so alarming that is screams fraudulent activities,” the report reads. PRICE ACTION: In afternoon trading, shares of Jumia have dropped over 11% to $29.51.
previous post