Are your wishes coming true this week as Wish parent ContextLogic preps to come public? The discount e-commerce firm is in focus as it plans to raise $1.1 billion this week. But if you are unfamiliar with the Wish IPO, you can still dive in. Here are 11 things you need to know about WISH stock.
To start, what exactly is Wish? Well, the company behind the e-commerce platform is ContextLogic. Essentially, ContextLogic sees itself as the discount version of Amazon (NASDAQ:AMZN). It focuses on selling lower-cost home goods, electronics and apparel, all available via its mobile app and online marketplace. Just like Amazon, Wish also believes that it has benefitted from the novel coronavirus pandemic.
With that in mind, here are 11 things to know about WISH stock and the Wish IPO:
- Wish will start trading on the Nasdaq Exchange this week under the symbol WISH.
- The company plans to offer 46 million shares at an IPO price range between $22 and $24.
- Importantly, this would give Wish a market capitalization of $16.4 billion.
- After the IPO, investors should note that CEO Peter Szulczewski will have more than 80% of the total voting power.
- Interestingly, Szulczewski is a former Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) engineer who founded Wish in 2010.
- Szulczewski wanted to create a more affordable e-commerce platform than Amazon, specifically targeting low-income and middle-income customers.
- Also importantly, this platform has seen growth thanks to the Covid-9 pandemic.
- It now has 150 million items in its catalog and sells about 1.8 million items per day.
- Along with that, it connects 100 million monthly active users with approximately 500,000 merchants.
- Wish brought in $2.3 billion in total sales for the 12 months ending in September 2020.
- However, investors should note that the company is still not profitable.
What to Know About the Wish IPO
So what should investors think about the Wish IPO and WISH stock? Importantly, it seems that there are two sides to this e-commerce story.
The first is that Wish represents another way for investors to dive into the red-hot world of e-commerce. There is really no denying how successful Amazon has been in 2020. Amazon delivered essential items, work-from-home comforts and everything in between. While so many other industries have suffered, Amazon has emerged victorious. Could Wish ride this wave, further benefitting from its focus on less affluent customers? There is certainly a reason to think so.
However, critics have very fairly pointed out a few concerns with the Wish IPO. Unlike Amazon, Wish is still unprofitable. Additionally, there is reason for concern over its business model. What do I mean? Well, one thing investors learned from its U.S. Securities and Exchange Commission filing is that Wish has very strong ties to China. In fact, most of its merchants are based in China, and they primarily sell to consumers in the U.S. and Europe. Earlier in the pandemic, this structure weighed on Wish.
Investors should also note that critics point to issues with fraudulent and counterfeit goods on the Wish platform. Although Amazon is also no stranger to issues with its product listings, this is something to keep in mind with WISH stock. Bad press and continuing issues with fraud could weigh on shares.
Go into the IPO with an open mind, and continue to do your research. With Wish seeking to raise more than $1 billion this week, it is certainly worth keeping on your radar.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.