Last month i bought calls for JMIA and made 700% on the calls. The stock has a predictable pattern of ups and downs so i bet up. was right. but now it's time for the down turn. However we are dealing with some unique forces because a few idiots like Citron and other MSNBC homos think it's going to be the next AMZN. Besides all of u/yoinkedmustache
points here ( https://www.reddit.com/wallstreetbets/comments/jo4n9t/puts_on_nigerian_scam/
) there are additional reasons why JMIA is a bad company, which i think is why they've had to release a beautifully-designed powerpoint deck full of irrelevant bullshit numbers (with a focus on percentages, not the magnitude of their paltry numbers) to keep the confusion and bs charade going.
-GMV is down by 15%. AMZN never once had a year where GMV was down from the year prior.
-They have EUR 147M in cash, but their 9 month operating loss is EUR 109M. They spend EUR 72M in G&A costs (tech, execs, etc.) in 9 months. They need to raise cash.
-They've slowed down on advertising (sounds like they're reaching their limit around EUR 150M in annual revenue)
-All of their bullshit about user growth is because they keep adding verticals like food delivery, JumiaPay, gaming, etc. which are not likely to be profitable either.
-Their 'business mix rebalancing' is a masterclass in stupidity. To turn the focus to fashion, beauty, home & living, FMCG away from difficult to find products like electronics is not going to work.
>The move to fashion, beauty, home & living, and FMGC seems smart for two reasons.
+Firstly, as a consumer, you don't really need to worry about the quality of fashion products or FMGC, either it's built into the brand (Proctor & Gamble) or its a t-shirt/shoes and you don't really need to be concerned with the 'quality' of a t-shirt or shoes (they don't cost $1000 nor are they going to explode upon opening). Trust is one of the two biggest issues facing JMIA, the other being the unnecessity of shopping online Africa, where small shops line neighborhoods.
++Study done which shows Africans have lower "interpersonal trust" than pretty much anywhere else in the world (https://ourworldindata.org/trust
), which is not good for e-commerce.
+ Secondly, the sellers of these products are typically smaller 'independent' businesses who JMIA can extract higher commissions from. 30% of total items sold on JMIA in 2019 were fashion or beauty products which are designed and manufactured by small local companies. The sellers also want an outlet to sell their products.
-With the pivot toward fashion/beauty product they've brilliantly increased their competition with Facebook's suite of products (FB, Instagram, WhatsApp), which are wildly popular in Africa.
-They're also competing with the millions of tiny little shops on the sides of the road, which are scattered across neighborhoods and main roads, which don't require you to wait, pay a delivery fee, or worry about delivery, waste your time opening the app, etc.
I'm sure there are 30 other reasons to short the shit out of the stock, but what is more a sign of death than slowing down growth when your an e-commerce platform in a market of 1.5B people (and you only have like 1-2% of the market as 'active users' which is a metric for anyone who bought something one-time in 12 months...to 'focus on profitability'.