Jumia Technologies AG (JMIA) Accused of Fraud
According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1934 between April 12, 2019 and May 9, 2019, in April 2019, Jumia Technologies AG (JMIA) completed its IPO for net proceeds of approximately $280.2 million. Less than a month after, Citron Research issued a research report announcing that “Jumia is a Fraud” that “deserves immediate SEC attention.” According to the Citron Report, while media in the U.S. naively anointed Jumia the “Amazon of Africa,” numerous articles have been issued in its home country of Nigeria claiming widespread fraud. An investigation by Nigerian news reporters described Jumia as a company “struggling to survive over internal fraudulent activities” and “filled with many shady deals.” The Citron Report further notes that, just prior to the IPO, Jumia issued a confidential investor presentation in October 2018 with key financial metrics that significantly differ from its registration documents, including its reported active consumers and merchants. When the truth was revealed, Jumia’s ADSs declined approximately 28% on heavy trading volume over a two-day period, from $33.11 per ADS on May 8, 2019 to $24.50 per ADS on May 10, 2019, and has yet to recover.
