There’s no denying it. Times have been tough lately for investors of mobile commerce company ContextLogic (NASDAQ:WISH). Since the company’s initial public offering (IPO), WISH stock hasn’t held up particularly well.
I won’t try to paint a rosy picture here. It’s a challenging situation if you’re an early investor.
Yet, perhaps it’s now possible to add to your position at a more favorable price point, or start a new position if you’re not already invested.
Besides, there’s favorable news to boost your spirits if you’re bullish on ContextLogic. In fact, there’s a value-added partnership in the works — along with a regulatory development that could advance the company’s geographic reach.
A Closer Look at WISH Stock
Let’s go back to the beginning, which actually wasn’t very long ago.
After ContextLogic set a price range of $22 to $24 for its IPO, the company sold 46 million shares of WISH stock at $24 apiece on Dec. 15, 2020.
Everything was off to a good start, or so it seemed. A brief rally ensued, with ContextLogic shares climbing to a 52-week high of $32.85 on Feb. 1, 2021. The situation turned sour after that, however. As it turned out, WISH stock sank during the following months, and even fell below $8 in June.
There might be a dip-buying opportunity here, though — and the potential for a comeback. As of July 12, the ContextLogic share price was already over $11.
In the interest of full disclosure, I feel compelled to reveal this: on a trailing-12-month basis, ContextLogic has -$3.16 in earnings per share. That’s not great news, but it’s not hopeless. Without a doubt, the stakeholders will want to see that number turn positive in the near future.
A License to Sell
The Wish platform is supposed to be a place where shoppers on multiple continents can purchase a wide variety of products online. And judging by some recently reported data, Wish’s global e-commerce ambitions are panning out quite well.
ContextLogic reported that its Core Marketplace segment’s first-quarter 2021 revenues increased by 40% year-over-year. Furthermore, looking at the bigger picture, the company’s total revenues for 2021’s first quarter showed a massive 75% year-over-year improvement.
That alone should convince the skeptics to change their minds. Yet, there’s even more good news to share.
On July 6, ContextLogic revealed that the Dutch Central Bank had granted the company a Payment Services License for the European Union.
Apparently, this license will enable Wish to increase the company’s control over the payments value chain in a compliant manner. At the same time, it should allow Wish to reduce its reliance on third parties.
This has vast geographic implications, as, in addition to the Netherlands, the license “will be passported to the other European markets where Wish operates.”
Expanding Its Reach
On top of all that, ContextLogic has disclosed a collaboration with another prominent e-commerce platform.
This could be a real game changer.
According to a press release, ContextLogic announced a two-year partnership with PrestaShop in which “more than 300,000 merchants and brands on the PrestaShop platform will be able to quickly and easily sell to millions of consumers on the Wish marketplace.”
The PrestShop platform operates in Europe and Latin America. So once again, we’re bearing witness to ContextLogic’s rapid expansion into the EU and, ultimately, around the world.
Alan Small, senior business development manager for Wish in Europe, expressed his company’s ambitious vision with the PrestaShop partnership; “Partnering with PrestaShop will enable us to offer our consumers even more quality merchants and brands and to provide Prestashop merchants with a global platform to transact on,” Small explained.
The Bottom Line
Okay, so WISH stock hasn’t been a blockbuster success since its IPO.
However, the story hasn’t been fully written yet.
And, the next few chapters could involve ContextLogic’s rapid progress — not only in the European market, but globally.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
