The overall market is holding up on Monday — a day ahead of the midterms — but the same cannot be said about Jumia (NYSE:JMIA) and other growth stocks. JMIA stock is down about 15% so far in Monday’s session.
The move has the stock hitting new 52-week lows and trading at its lowest level since May 2020.
Now trading near $4.20 a share, investors are looking for direction. Investors want to know if it’s time to bail, and prospective buyers want to know if they should buy. The answer to those questions depend on how investors feel about the new management changes.
Co-CEOs Jeremy Hodara and Sacha Poignonnec will be stepping down, effective immediately. Francis Dufay will now serve as the company’s CEO and on its board. According to the company, “he has been with the Company since 2014 and has held multiple senior leadership roles.”
CFO Antoine Maillet-Mezeray has been promoted to executive vice president, finance and operations. He has been with the company for six years now. According to chairman Jonathan Klein:
“We thank Jeremy and Sacha for their leadership over the last decade to envision and build a company that became the leading pan-African e-commerce player. As we look ahead to the next chapter of Jumia’s journey, we want to bring more focus to the core e-commerce business as part of a more simplified and efficient organization with stronger fundamentals and a clearer path to profitability.”
Breaking Down JMIA Stock
With today’s fall, JMIA stock is now down 63.4% so far on the year and 93.6% from its all-time high. Shares would need to gain almost 1,600% to recoup all of the losses.
With earnings due up on Nov. 17, there’s good news and bad news. The bad news is that’s a long time to wait for a further explanation from management when the stock is hitting new annual lows. It’s also a very difficult macro environment at the moment. Combined with the new management team, a “kitchen sink” quarter could be on tap.
The good news? Investors only have to wait 10 days to get an update on the business. Further, a kitchen sink quarter could lead to a trade-able low in JMIA stock. Lastly, a sharper focus on profitability may be just what the company needs at a difficult time like this.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.