Jumia’s ($JMIA) share price plunged sharply on Thursday, continuing a beating that began on Tuesday after the company posted revenues of $36.5 million in Q2 2024, missing analyst estimates of $41.7 million. A market rally in the last three weeks saw Jumia’s share price hit $13 and a market capitalisation of over $1.3 billion, but those gains have quickly been wiped out.
Before the market opened on Thursday, Jumia was trading at $4.91, resulting in a market capitalisation of $496 million. It will put question marks around the company’s plans to sell 20 million shares as reported by TechCrunch on Tuesday. The company had planned to take advantage of July’s rally to sell new shares. If it sells shares at current market price of $4.91, it could raise $98 million.
Selling secondary shares would have boosted its cash position, as it has $92.8 million in cash and cash equivalents. Jumia raised $386 million in 2021 after its share price unexpectedly jumped to $49.
“The new funding will be used to expand our supply chain network, particularly by enhancing logistics to reach smaller cities and broadening our overall network,” CEO Dufay told TechCrunch.
If it eventually raises funding, it will invest in technology and scale “the company faster and break even faster.”
While the company narrowed its losses to $19 million in Q2 cutting advertising spend and using its cash more efficiently, active customers remained flat and currency devaluation in key markets like Nigeria made it difficult to grow revenue.
Jumia did not immediately respond to a request for comments.
Editor’s note: A previous version of this article incorrectly stated that Jumia planned to raise $100 million. The company could raise up to this amount if it sells all 20 million shares at the current market price of $4.91.
