Egyptian tech entrepreneur Ashraf Sabry loses over $10 million in 33 days

Egyptian multimillionaire Ashraf Sabry has seen the market value of his stake in his fintech company, Fawry, slump by EGP158.14 million ($10.08 million) in 33 days.

With a market capitalization of $1.38 billion, Fawry is one of Africa’s few technology companies worth over $1 billion. It is the leading e-payment platform in Egypt and the largest in North Africa.

Fawry is also the most popular fintech app in the Middle East. Sabry, who founded the payment platform in 2008, holds a beneficial 2.345-percent stake in the company.

As a result of a sustained sell-off in Fawry’s shares driven by investors hunting for value, the company’s share price on the Egyptian Stock Exchange slumped from EGP16.7 ($1.0648) on Oct. 18 to EGP12.75 ($0.8129) on Nov. 20. This translates to a 23.65-percent loss for shareholders.

Since Oct. 18, the market value of Sabry’s stake in the leading fintech company has declined from EGP668.61 million ($42.63 million) to EGP510.46 million ($32.54 million) as of the time of writing, accruing losses of EGP158.14 million ($10.08 million) for the multimillionaire founder.

In the first nine months of 2021, Fawry reported a 7.8-percent decline in profits from EGP122.44 million ($7.81 million) in 2020 to EGP112.84 million ($7.19 million), despite a 23-percent increase in operating revenues.

The decline in earnings was spurred by increased wages and salaries, which led to a surge in operating expenses.

As a result of the wage increase, general and administrative costs soared from EGP137.34 million ($8.76 million) to EGP201.72 million ($12.86 million).

Fawry also experienced a double-digit increase in sales and marketing expenses, from EGP147.29 million ($9.39 million) to EGP201.37 million ($12.84 million).