Afrigather Jumia’s ($JMIA) share worth plunged sharply on Thursday, persevering with a beating that started on Tuesday after the corporate posted revenues of $36.5 million in Q2 2024, lacking analyst estimates of $41.7 million. A market rally within the final three weeks noticed Jumia’s share worth hit $13 and a market capitalisation of over $1.3 billion, however these positive aspects have rapidly been worn out.
Earlier than the market opened on Thursday, Jumia was buying and selling at $4.91, leading to a market capitalisation of $496 million. It’ll put query marks across the firm’s plans to promote 20 million shares as reported by TechCrunch on Tuesday. The corporate had deliberate to benefit from July’s rally to promote new shares. If it sells shares at present market worth of $4.91, it might elevate $98 million.
Promoting secondary shares would have boosted its money place, because it has $92.8 million in money and money equivalents. Jumia raised $386 million in 2021 after its share worth unexpectedly jumped to $49.
“The brand new funding can be used to broaden our provide chain community, notably by enhancing logistics to succeed in smaller cities and broadening our total community,” CEO Dufay advised TechCrunch.
If it will definitely raises funding, it is going to put money into know-how and scale “the corporate sooner and break even sooner.”
Whereas the corporate narrowed its losses to $19 million in Q2 slicing promoting spend and utilizing its money extra effectively, energetic prospects remained flat and foreign money devaluation in key markets like Nigeria made it troublesome to develop income.
Jumia didn’t instantly reply to a request for feedback.
Editor’s word: A earlier model of this text incorrectly said that Jumia deliberate to boost $100 million. The corporate might elevate as much as this quantity if it sells all 20 million shares on the present market worth of $4.91.
