The action begins to trade on the Nasdaq


Shares in the Wish discount e-commerce market fell more than 13% when the company debuted on Wednesday.
The opening trade was $ 22.75 per share, below its IPO price of $ 24 per share, which was at the high end of expectations. The offer raised $ 1.1 billion and gave the company an initial valuation of more than $ 14 billion. Private investors valued the company at $ 11.2 billion.

ContextLogic, the parent company of Wish, applied for a scholarship last month. Last week, the company estimated the stock’s price to be between $ 22 and $ 24, and on Tuesday the price was at the top of that range.

Wish, founded in 2010 by former Google engineer Peter Szulczewski, is an online marketplace that offers a variety of products at a discount, from inexpensive home items and clothing to electronics and toys. The app offers a host of products for just a few dollars to target low- and middle-income consumers with more affordable options than what they can find on other sites, including Amazon.

The company’s reputation for selling knickknacks at a discount has earned it being compared to an online dollar store. But Szulczewski told CNBC on Wednesday that he believes “Wish’s value is much higher.”

“We strive to provide as much value as possible to our consumers, and it has served us well,” Szulczewski told David Faber on “Squawk on the Street”. “We think this is an underserved demographic. ”

Wish is going public at a time when online sales are skyrocketing as the coronavirus pandemic has pushed more people to avoid going to stores in favor of shopping safely at home on their smartphones. The trend has led rival e-commerce companies like Amazon, Shopify, and Etsy to be among the biggest beneficiaries of the pandemic.

The company’s IPO prospectus revealed that it was growing slower, from a much smaller base, than its online retail counterparts like Amazon and Walmart. Wish reported revenue of $ 1.75 billion for the nine months ended September 30, a 32% growth rate, while Amazon saw first-party sales growth of 38% on a year to reach $ 48.4 billion in the third quarter. He lost $ 176 million in the first nine months of 2020.

The offer follows the successful IPOs of Airbnb and Doordash, which exploded in their early days. Wish’s debut is likely to close what has already been a busy year for tech IPOs, especially in September, which saw a flood of software companies go public.

ContextLogic works with underwriters, including Goldman Sachs and JP Morgan. Its shares trade on the Nasdaq under the symbol WISH.


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