ContextLogic — Parent of Wish — Drops 5% on First Trading Day

Reuters  |

Image source: Wish.com

(Reuters) -Shopping app Wish’s parent company ContextLogic Inc saw its share price fall more than 5% in its trading debut on Wednesday, after raising $1.1 billion in an initial public offering (IPO).

The lackluster debut comes after mega-IPOs and stellar first-day pops of companies including Airbnb Inc, DoorDash Inc and SnowFlake Inc.

ContextLogic was founded in 2010 by Chief Executive Peter Szulczewski, formerly of Google, and Yahoo veteran Danny Zhang. Its Wish app is known for selling bargains from China and boasts 100 million monthly active users globally.

“We are investing in logistics, scaling the team on a global basis, looking for new revenue streams and improving our customer experience, which is more like (social media app) TikTok for shopping,” Szulczewski said in an interview.

The COVID-19 pandemic has led to a surge in online shopping as consumers stayed at home, but also brought disruption to supply chains. In July-September, Wish booked $606 million in revenue, up 33%, and a net loss of $99 million.

The company is expanding local warehouses to better control shipping times and bundling orders to cut shipping costs for the 2 million products sold per day.

Hans Tung, managing partner at early Wish investor GGV Capital, said the success of dollar stores highlights the potential of an e-commerce platform focusing on less affluent consumers.

“Many of our consumers are willing to wait if the price is better. We’re taking a differentiated approach,” said Tung. “We still have a lot more room to grow in the U.S. and the penetration in emerging markets is pretty early.”

Other investors include Peter Thiel’s Founders Fund, General Atlantic and DST Global.

Goldman Sachs, J.P. Morgan and BofA Securities were lead underwriters for the IPO.

Reporting by Noor Zainab Hussain in Bengaluru, Chibuike Oguh and Krystal Hu in New York; Editing by Maju Samuel and Christopher Cushing.

_____

Source: Reuters

Stock price data is provided by IEX Cloud on a 15-minute delayed basis. Chart price data is provided by TradingView on a 15-minute delayed basis.

Trending Articles

High Hopes: Cannabis Stocks, Big Tobacco and M&A
A Closer Look at the CHIPS Act and Its Implications for the U.S. Market
China, Taiwan and the Boycott: The Data Tells the Story
An Easy Way to Profit Off One of Today’s Strongest Sectors
The Future of Smartphones is Still Unfolding: Jeff Kagan
These Stocks are Sending a Signal (Like Amazon in 2008)
It Isn’t a Recession Until This Group of Economists Says So
What You Should Know About Europe's Energy Wars

Market Movers

Sponsored Financial Content