Editor’s Note: May 14, 2019

Jumia is getting a crash course in being listed

Africa-focused e-commerce startup Jumia published its first quarter results on Monday, a day earlier than planned, in a bid to reassure the market following fraud allegations made last week by short seller Citron Research.

Citron claims Jumia deceived investors ahead of its listing on the New York Stock Exchange last month by inflating customer numbers, calling it a “fraud”. The allegations – which the company denies – sent its shares down almost 15% Friday, fueling media speculation about how sound the loss-making business is.

It’s attention Jumia can do without, but needs to get used to. 

With its new status as a public company comes the intense scrutiny of the market – from demands for transparency around its finances, to greater accountability to shareholders, and media and analyst attention.

This can be unforgiving. Over the weekend Jumia circulated a note by Citibank countering some of Citron’s accusations, but also saying that the company needs to be more transparent about the issues raised.

The startup is also learning how fickle the market can be. It’s stock soared 224% from its $14.50 debut on April 11 to $46.99 on May 1, and has fallen ever since, closing at $24.5 on Monday.

It’s a crash course in what it’s like to be a listed company.

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