The world’s second-largest wine and spirits company, Pernod Ricard, bought 1.27 million shares in Jumia’s recently revealed secondary sale. Pernod Ricard makes popular drinks like Jameson. A recent legal filing shows that the global spirits seller’s share in Jumia rose from 6.4% to 7.5%.
It’s not clear how much the global spirits seller paid for the new shares, but an SEC report by Jumia shows that its stocks (JMIA) traded at $4.68 on August 6, the day that Pernod Ricard bought them. At that price, they would have paid $6 million.
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Dynamics of Pernod Ricard’s Investment in Jumia
Pernod Ricard has long invested in Jumia and used to own 8.2% of the company. Between 2020 and 2021, the store issued more shares, reducing Ricard’s shareholding to 6.4%.
Jumia did not immediately respond to requests for remarks. Although Pernod Ricard verified the transaction, the company did not disclose any other details.
According to a data source, the spirits maker’s share buy reflects its support in the African e-commerce behemoth, whose share price fell after missing revenue projections in Q2 2024. Share dilution from secondary sales was another problem.
Understanding Jumia’s Market Dynamics in 2024
Jumia’s market value reached $1.3 billion in July 2024, when its share price increased 252%. Investors were hopeful because the company was using its cash more efficiently and had changed how it does business.
Read also: Jumia stock soars 17.72% in less than 24 hours
In February 2023, the store fired 900 workers and lowered executives’ pay. In December 2023, it shut down Crave Food, a food delivery service, because it was losing money.
The company’s 2024 Q2 report shows that its efforts are paying off, as it saw its losses drop to $19 million, which is half of what they were in Q2 2023.
Its financials for 2024 also show that even though it cut ad prices, the number of orders has increased to 4.8 million. Jumia says customer relationship management and SEO optimisation helped the platform’s users grow by 6%.
The platform now has 2 million active users every three months, which is a valuable metric for Pernod Ricard, which sells its drinks on Jumia directly and through third-party sellers who use the platform across Africa.