I found out about this company rcenlty while reading the Mercado Libre message boards on Yahoo finance. This company was founded by 2 German ex-McKinsey consultants and is headquartered in Germany. 90% of the revenue is from the third party sellers on its marketplace platform and the other 10% is from its own inventory. Jumia’s logistics service enables the shipment and delivery of packages from sellers to consumers. Its payment service facilitates transactions to participants active on the company’s platform in selected markets. Jumia is in multiple African countries and is striving to become the Mercado Libre of Africa. The ipo was last year where it debuted at $14.50 quicky shot up to the low 40’s and then eventually cratered. It is now around $5. The company has never been profitable and if it does not turn a profit this year it could run out of cash for operations. It is backed by several vc’s and Goldman Sachs. I decided to take a very small position in this just to track it. I realize its highly speculative, but the company is putting the infrastructure in place to turn a profit in the future. Just like Amazon did in its early days. I’m not that worried about its ability to raise funds because it does have a solid list of backers it can turn to do that.
Hey,
I’m in Jumia as well, but I would do some extra background research before increasing your position. Jumia was accused of (and admitted) to some fraudulent accounting late last year. The company said it was one rogue employee who was immediately terminated, but there are signs they knew as early as pre-IPO.
In terms of the business itself, Jumia has extremely spotty growth numbers (58% one quarter, 19% the next), which doesn’t lend well to idea that it will be the next Amazon. It’s clearly having trouble meeting a need in Africa, otherwise a proper product-market fit would send their growth skyrocketing.
That being said, I nibbled on some JMIA Jan 2022 call options when the price was $3. If it does correct itself and starts to take off, awesome. If not, no real harm done.
CloudAtlas
I read that about the fraud. Let’s hope the company is telling the truth that it was just a rogue employee. This is a good recent interview with the ex-CEO of Jumia, where he talks about the challenges facing the company:
https://www.thisdaylive.com/index.php/2020/05/11/jumias-surv…
I found out about this company rcenlty while reading the Mercado Libre message boards on Yahoo finance. This company was founded by 2 German ex-McKinsey consultants and is headquartered in Germany. 90% of the revenue is from the third party sellers on its marketplace platform and the other 10% is from its own inventory. Jumia’s logistics service enables the shipment and delivery of packages from sellers to consumers. Its payment service facilitates transactions to participants active on the company’s platform in selected markets. Jumia is in multiple African countries and is striving to become the Mercado Libre of Africa. The ipo was last year where it debuted at $14.50 quicky shot up to the low 40’s and then eventually cratered. It is now around $5. The company has never been profitable and if it does not turn a profit this year it could run out of cash for operations. It is backed by several vc’s and Goldman Sachs. I decided to take a very small position in this just to track it. I realize its highly speculative, but the company is putting the infrastructure in place to turn a profit in the future. Just like Amazon did in its early days. I’m not that worried about its ability to raise funds because it does have a solid list of backers it can turn to do that.
I also found a reference to JMIA while researching MELI. Passed on it after reading about possible fraud and seeing that it cratered to single digits. Ultra high risk/reward.
It takes buyers and sellers to make a market.
Consider me on the sell side of JMIA. I have been using this most recent run-up in the JMIA’s stock price to divest of my JMIA holdings. Over the past several weeks, everytime a tax lot gets to break-even or slightly profitable, I automatically sell. JMIA walks and quacks like Luckin coffee and the “moonshot”/“speculative” side of my expansive portfolio is being trimmed back so that I may invest more in solid, high-quality, high-margin, high-growth companies. While this subset of companies may be highly volatile in these crazy times, when you pull back the curtain, there is substance and not just some old guy pulling levers…a Wizard of Oz reference for the younger folk that participate on this board.