Citron Doubles Down on Jumia Short Thesis

Less than a month after Citron Research’s Andrew Left accused Jumia Technologies AG - ADR JMIA of being an “obvious fraud,” Left doubled down on his bearish outlook for the stock on Tuesday, citing “indisputable evidence” the company is a fraud.

Jumia is an African e-commerce company that has often been compared to Amazon.com, Inc. AMZN.

“Former executives from Jumia have volunteered to provide indisputable evidence that Jumia is a complete fraud,” Left wrote Tuesday.

Internal Documents

Citron referenced tweets by former Jumia landlord and African tech leader Rebecca Enonchong, and a BBC interview with African private equity investor Issam Chleuh, as well as internal emails, spreadsheets, presentations and interviews from former Jumia executives that left the company rather than be involved in the deception.

On May 9, Left released his initial report on Jumia that was based on discrepancies between a “confidential investor presentation” from October 2018 and information Jumia provided to U.S. investors prior to its April IPO. Left claims Jumia inflated its numbers to pump up its IPO valuation after it couldn't raise money from its top investors in Africa.

Citron claims Jumia reported 2.1 million active customers and 43,000 active merchants for 2017 in its 2018 investor presentation, but it reported 2.7 million customers and 53.000 merchants to the U.S. Securities and Exchange Commission. Left also alleges that Jumia did not tell U.S. investors that 41 percent of its total 2018 orders were returned.

On Tuesday, Left added Jumia allegedly has an undisclosed key performance indicator suggesting more than half of the company’s total orders in Nigeria, its largest market, are “invalid or fraud.”

Price Target $0

Following the release of the new report, Left tweeted that things are so bad at Jumia that the stock is a candidate for a regulatory halt and/or delisting.

“Former executive testimonies with documented proof of manipulated financials and FAKE ORDERS Auditors must resign and restatements will take Jumia to $0,” he wrote.

Jumia shares initially traded lower by 4.6 percent on Tuesday and are down 32 percent since Citron’s initial fraud accusations.

The stock traded around $23.41 per share at time of publication Tuesday afternoon.

Related Links:

Citron Research Calls Jumia An 'Obvious Fraud'

6 Months After Turning Bullish, Citron's Andrew Left Is Out Of Tesla

Photo credit: Max19871010, Wikimedia