Bailey GiffordThe Edinburgh-based asset management firm long known for its predilection for pre-IPO tech companies has reduced its shares in African e-commerce giant Jumia, according to the latest reports. Presentation 13G/A issued by the asset manager.
According to the filing, Baillie Gifford disclosed ownership of 18.75 million shares in Jumia, representing 13.69% of the company. In Jumia’s previous filing from a year ago, the asset management firm held 19.85 million shares and owned 10.06% of the company at the time. That’s a 5.50% decline in shares and a 0.67% drop in property.
The Scottish asset management firm, well into its centenary, has been an early backer of renowned public and private technology companies such as Amazon, Google, Salesforce, Tesla, Airbnb, Spotify, Lyft, Palantir and SpaceX. It has also invested in deals in other geographies, including China’s Alibaba and NIO, and Africa-based internet companies Naspers and Jumia.
Baillie Gifford bought Jumia shares in 2019, three years after the e-commerce giant went public. The Scottish mortgage trustee firm, which is owned by Jumia largest institutional investor, has sold and bought back a portion of its shares every January since then, and this recent move is its most significant share drop yet. Baillie Gifford remains the largest shareholder in the e-commerce platform.
Last November, after several years of reporting losses, Jumia made changes to its management after installing Francis Dufay as interim CEO to replace co-founders Sacha Poignonnec and Jeremy Hodara, who stepped down from their co-CEO roles. The move came with instant cuts across several product lines and layoffs, including the firing of some executives from its Dubai office. All of this is to chase the profits that have eluded the company.
In the third quarter of 2022, the African e-retailer made considerable progress in reducing its losses by 13%, from $52.5 million to $45.5 million, its lowest level in six quarters. Despite this progress, public confidence in the eCommerce team appears to have waned. Jumia has seen its share price drop by 51% over the past year and its shares fell to $3.88 per share after the news on Wednesday; It is trading slightly above $4 with a market capitalization of $404 million. The electronic retailer closed the third quarter with a liquidity position of $284.7 million, of which $104.3 million correspond to cash and cash equivalents.
Baillie Gifford’s decision to sell some of his shares may have to do with Jumia’s performance on the stock market. On the other hand, it could be the investment firm’s way of paring mounting losses it began to incur last year, particularly around growth stocks, which have taken big hits from rising interest rates. interest and recession fears (last week, the investment group admitted that 2022 was a “humbling year” after losing more than $14 billion in stakes in Tesla and Shopify, according to financial times). However, that doesn’t explain why the fund group, with more than $230 billion AUM, increased its position in other loss-making companies, such as Chinese electric vehicle maker NIO and Wix.com, last week. Jumia’s upcoming earnings call next month should shed more light on the matter.
It’s not all gloom for Jumia, however, as other big shareholders including DE Shaw, Goldman Sachs and Bank of America have taken a different route and increased their shares in the company, owning 2.21%, 1.27 % and 1.40%, respectively. for nasdaq.
