In the first quarter of 2019, Jumia, the darling of African e-commerce, went public on the New York Stock Exchange (NYSE). At the time, faint murmurs questioned why the company shunned the Nigerian Stock Exchange (NSE), the second-largest bourse on the continent.
A few weeks ago, Jumia released its financial results for the second quarter of 2020, revealing its best performance since the listing as operating losses fell from €66 million to €37 million year-on-year. Even before interest and tax payments, Jumia is still making substantial losses.
As Jumia reported another loss, those murmurs could be given a straightforward reply: how would a loss-making business like Jumia be received on the NSE?
Valuing a company is more art than science
There is no single definition of a successful Initial Public Offering (IPO). In this case, we define a successful listing to be when the stock is actively traded (liquid) after listing, and, assuming no major market shocks, the