A german-based technology company, Rocket Internet, has sold off its stakes in Jumia, as the African eCommerce firm’s shares continue to decline on the New York Stock Exchange.
Rocket Internet’s Head of Finance and Investments, Bettina Curtze, disclosed that the tech investor sold its 11% stake in Jumia around November 8, 2019.
Jumia’s shares have been on the decline since its unusual initial public offering last April. The declining share price has been blamed on an unflattering report by short-seller, Andrew Left of Citron Research, which opened a series of allegations against the company.
While Rocket Internet did not reveal the exact amount it generated from the sale, it stated that the proceeds were included in the €2.1 billion ($2.30 billion) net cash the company had as of March 31.
It should be noted that Rocket Internet is known for listing and selling its stake in Startups.
The German investor has stakes in more than 200 private companies, including the furniture site – Home24, and Global Fashion Group which sells fashion items online.
According to Rocket Internet, the total fair value of these private companies was about €1.1 billion as of December 31, 2019. However, it said the figure might have been impacted by the Coronavirus pandemic.
The problem with Jumia: The company has been confronted with challenges and allegations since listing its shares. These range from claims that the company deceived its investors, to accusations that it doctored its books. All these have led to a class-action lawsuit.
Although the company’s shares had soared to $14.50 after listing on the New York Stock Exchange, it now trades at $2.82. If anything, this is a clear indication that there is trouble in paradise.
Yahoo Finance reported that in February 2020, Jumia disclosed that its fourth-quarter adjusted loss before interest, taxation, depreciation, and amortization rose by 5% to €51.2 million. The company also reported that it had €232 million of cash as of the end of 2019.
Source: Nairametrics
