Jumia Technologies AG JMIA, -18.79% shares sank 14.6% in Thursday trading after Citron Research’s Andrew Left, a noted short seller, announced in a report that they have the “smoking gun” that shows why Jumia equity is “worthless”.

“In 18 years of publishing, Citron has never seen such an obvious fraud as Jumia,” the report said. Citron goes on to highlight what it calls “material discrepancies” between the confidential investor presentation from October 2018 and what the company told the Securities Exchange Commission, including: inflating active customer and active merchant numbers by 20% to 30%; and that 41% of orders were returned, not delivered or canceled.

“When a company markets to investors ahead of its IPO and then a few months later omits material facts and makes material changes to its key financial metrics to make the business seem viable, this is securities fraud,” the report says.

Citron also references media from Nigeria, Jumia’s biggest market, accusing Jumia of fraudulent activity.

Jumia shares began trading on April 12, and soared 160% as of early this week. Shares were priced at $14.50. (Market Watch)

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