What happened

Shares of Africa's e-commerce company Jumia Technologies (NYSE:JMIA) soared 87.2% higher in October, according to data provided by S&P Global Market Intelligence. Since the end of October, the stock has surged almost 20% more and is now up around 160% year to date, trouncing the market. This stock was left for dead in 2019 after allegations of fraud surfaced, but Jumia got a little help from an old foe to win investors back.

So what

Citron Research is a notorious short-seller, but in an Oct. 9 tweet on Twitter, the research firm said it does not recommend shorting Jumia stock. That's significant because in 2019, Citron was making the allegations of fraud in the first place. Citron's reversal of opinion sent Jumia stock higher, and the firm promised a full report the following week.

A businessman rides a rocket ship expelling cash exhaust over a multi-colored bar chart.

Image source: Getty Images.

The full report from Citron called Jumia stock "the generational buy." The firm notes how the COVID-19 pandemic is pushing the need for e-commerce and digital payments on the African continent -- all needs that Jumia is positioned to meet. And it argues the company is learning by copying the blueprints of successful companies like Amazon and Sea Limited. Citron believes these factors and more mean Jumia "should be worth minimum $7 billion or $100 per share" right now. 

Now what

It's true Jumia has potential, but this optimistic investor outlook is really the only thing making the stock go higher right now. For example, the stock soared on Oct. 8 after announcing that a new platform called Jumia Games was launching in five countries for JumiaPay users. This could be a big, profitable venture, but as of right now, all we know is that Jumia Games has launched. The financial impact is still unknown, making the stock's 15% single-day jump a little premature, in my opinion.

Jumia is expected to report earnings on Nov. 10. Then we'll see if its business is truly gaining momentum during the coronavirus.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.