Jumia Stock: 1 Big Red Flag to Watch

The market doesn't seem to know what to make of Jumia Technologies (NYSE: JMIA).

Shares of the African e-commerce company debuted last year and surged out of the gate, reaching nearly $50 a share from an IPO listing price of $14.50. However, the stock plunged from there on a number of concerns, including weak financial results, fraud in its sales force ranks, and attacks from short-sellers.

The stock fell as low as nearly $2 per share in March, but then something surprising happened. Since October, the stock has rocketed higher, gaining more than 500% in the last three months. The primary catalyst for the surge seems to be a bullish endorsement by Citron Research, the investment firm run by well-known short-seller Andrew Left, who called Jumia a "generational buy" and said that an investment from a partner like Alibaba Group Holding or SoftBank Group was "inevitable."

Source Fool.com