Shares of Jumia Technologies, a pan-African e-commerce platform led by French businessman Jeremy Hodara, rose 14.8 percent on Fri., May 14, as investors on the New York Stock Exchange (NYSE) increased their buying interest after a flurry of media reports that Nigerian tech tycoon and Zinox Group Founder Leo Stan Ekeh may be planning a takeover bid for the e-commerce platform.
In response to media reports that Ekeh, the owner of Zinox Technologies, was quietly amassing Jumia’s shares four years after acquiring Konga, a rival to his e-commerce firm, Yudala, Gideon Ayogu, Zinox Group’s head of corporate communications, stated that the company has no knowledge of such a transaction and thus cannot officially confirm or deny the speculation.
Despite no official confirmation or denial of an ongoing or potential takeover of Jumia, data obtained by Billionaires.Africa revealed that shares in the e-commerce platform rose 14.8 percent on Friday, opening at $5.13 per share and closing at $5.89 per share.
Jumia Technologies’ market capitalization soared above $588 million thanks to a double-digit percent increase in its shares.
Despite the increase in its stock price on Friday, Jumia shares are down more than 50 percent since the start of the year, as investors sold off shares in tech companies with high price and earnings multiples, with market participants divesting and reallocating funds into fundamentally strong companies in the oil and gas and industrial sectors.
Experts believe that Ekeh’s takeover of Jumia would likely make Zinox the largest e-commerce owner in Africa, as it controls Konga, another e-commerce giant, and Jumia’s main competitor.
Konga in 2021 delivered profits after a massive cut in operation costs, restructuring, and the implementation of a drastic change in its business model, whereas Jumia reported losses after taxes of about $227 million in its annual income statement and has only $413 million in net equity.
Ekeh has invested heavily in Konga through his technology firm, with the e-commerce acquiring warehouses across the country as it adopted a combination of online and offline sales to meet customer demand.
The Nigerian businessman recently donated N50 million (approximately $121,700) to the Nigerian Computer Society to support innovation and development projects. The grant, according to the 65-year-old businessman, will benefit the society’s newly established Innovation and Development Fund.