The brash criticism against Jumia Technologies AG by Citron Research has taken another dimension.
In the latest update to its scathing report on Jumia as a ‘fraud’ and a ‘worthless’ stock, Citron has released an article which referenced several tweets by Rebecca Enonchong, a popular tech founder.
Citron claimed that Rebecca knows better than anyone else because of her position and experience in the African tech investment landscape ‘Rebecca Enonchong knows more than anyone who owns or has written on this stock and is proof why JMIA should be halted for investigation,’ the statement said.
“We would also like to apologize to the Nigerian people who while in the midst of a nationwide battle against corruption have had to endure a European management exploiting the African name to perpetrate a fraud on the investing public.”
“More about this can be read on Twitter at#JumialsNotAfrican.Rebecca Enonchong, named by Forbes as one of the top 10 female tech founders to watch in Africa and featured by the World Bank only two months ago as “a Heavyweight in African Tech”, was named a Global Leader for Tomorrow by the World Economic Forum of Davos, Switzerland. NewAfrican magazine has listed her as one of the most influential Africans in 2014, 2016 and 2017.”
Jeune Afrique magazine has also named her as one of Africa’s 50 most influential women of 2017 and as one of the world’s most influential Africans in2018 and 2019. Enonchong is easily one of the most powerful tech founders in Africa today and this is what she thinks of Jumia”
Jumia has not issued any response to these allegations but its stock price has tumbled by close to 20% since Citron released its results.
Rocket Internet, a German tech company with several technology startups under its umbrella founded Jumia in 2012. Jumia has never made a profit, a journey that seems farther than expected. In 2016, Rocket Internet’s chief financial officer had projected that the company would turn a profit in two years.
It is still not clear if the NYSE will halt trading in the shares of Jumia nor would an investigation be sanctioned on the company’s filings.
However, Kaskela Law LLC, an American law firm, said it has started a formal investigation into Jumia Technologies AG.
The investigation is a follow up to the indicting report published by Citron Research regarding alleged false information the eCommerce company gave to investors in its initial public offering, IPO, filings submitted to the US Securities and Exchange Commission, SEC for its New York Stock Exchange listing.
Kaskela said in a statement that the investigation is on behalf of the company’s investors. The investigation seeks to determine whether Jumia violated the federal securities laws in connection with statements made to investors.On May 9, 2019, Citron Research published a report alleging that Jumia has misrepresented to investors, among other things, its active consumer and active merchant figures.
The company was officially listed on the New York Stock Exchange, NYSE, opening at about $24, the stock went up as high as $38 per stock but has since dropped back to $24 as at the time of writing this report.