Jumia to raise over $100m in secondary shares as growth stalls
TLDR
- Jumia plans to sell 20 million American depositary shares, potentially raising $100 million.
- Share price dropped from $5.70 to $4.90 due to news of dilution and global carry trade impact.
- Stock market sees decline following 200% rally over the last three months.
New York-listed African e-commerce company Jumia is planning to sell 20 million American depositary shares over the next couple of weeks, according to TechCrunch.
With its share price at around $5.70 when the stock market opened on Tuesday, the e-commerce company could potentially raise around $100 million through this new share offering. But the final amount will depend on the share price, which has since declined to $4.89 as of time of writing.
This drop from around $11 on Monday, following a 200% rally over the last three months, may be attributed to shareholders reacting unfavorably to the news of dilution, the impact of global carry trades, or both.
Points clés à retenir
Shares of Jumia tumbled on Tuesday after the company reported another loss, lower revenue, and flat customer growth for the second quarter. The stock fell 48% to $5.47 in early afternoon trading, although shares are still up 55% since the beginning of the year. Jumia posted an operating loss of $20.2 million, compared to a loss of $22.1 million in the same quarter last year, buoyed by cost reductions. The company reported an adjusted loss (EBITDA) of $16.3 million, compared to an adjusted loss of $18.2 million the previous year. Revenue fell 17% to $36.5 million, primarily due to foreign exchange devaluations, partially offset by higher commissions. Gross merchandise value (GMV) fell 5% from last year to $170.1 million, dragged down by currency devaluations. Total payment volume declined 7.1% to $45.9 million. The number of active customers remained flat year-over-year, while orders increased 6.9% to 4.8 million.
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