U.S. e-commerce platform ContextLogic (NASDAQ:WISH) has an appropriate ticker symbol. Since 2022, WISH stock has lost nearly 21% of its value. That’s on top of an 82% drop in 2021.
Trading around the $2.50 mark as I write this, shareholders have been left wishing ContextLogic had a business strategy to lift it off the mat. Unfortunately, it doesn’t. In fact, unless I’m missing something, it’s strategy is far from that.
However, if you own WISH and are sitting on a significant paper loss, you’re now stuck between a rock and a hard place. Sell and you crystalize your loss. Hold on and you risk missing out on a better buy. It’s a tough choice, no doubt.
As I see it, though, there are plenty of stocks with a market capitalization of $1 billi0n or higher that are trading below $3. Not all of them are diamonds in the rough. But these three names seem to be.
Why You Should Sell WISH Stock
Before I get into my three alternatives to WISH stock, let’s get up to speed about ContextLogic’s business heading into 2022.
This company has no news for investors more than halfway into January. The last piece of information it distributed in mid-December discussed its “Pop Up” vending machine in Times Square. In collaboration with Nasdaq (NASDAQ:NDAQ), 100% of the sales between Dec. 16 and Dec. 18 were donated to The Robin Hood Relief Fund.
While a beautiful gesture, I’m sure WISH stock shareholders expect more from management.
I last wrote about ContextLogic on Dec. 16. I said that its $3.24 share price at the time was still too high. Unfortunately, with little news and shrinking revenues, the price is now still higher than expected.
As fellow InvestorPlace contributor Josh Enomoto recently noted, the fact that ContextLogic insiders are selling as fast as possible says all you need to know about its prospects.
Typically, I pay zero attention to insider selling. It’s generally meaningless. However, every once in a while, there’s a point made by a sale. This is one of those times.
Please do yourself a favor and get the lifeboat before it’s too late.
The First of Three Possibilities
On Jan. 6, Sundial and Alcanna (OTCMKTS:LQSIF) announced a change in their merger arrangement. Previously, Sundial was issuing stock to pay for the Canadian liquor and cannabis retailer. With the change, it is now paying 1.50 CAD ($1.20) and issuing 8.85 Sundial shares for each share of LQSIF stock. Previously, Sundial was going to issue 10.69 Sundial shares. Ultimately, Sundial pays 8.43 CAD ($6.73) per Alcanna share, slightly higher than the original offer.
In my December article, I didn’t even address the Alcanna deal. Instead, I merely suggested that risk investors could be pleasantly surprised in three to five years.
Currently, Sundial’s market capitalization is just around $1 billion. That’s $600 million less than ContextLogic. From where I sit, you’d be crazy not to change horses at this point.
Buzz Into the Hive
Next up for this list of WISH stock alternatives is Hive Blockchain(NASDAQ:HIVE). On Jan. 12, Hive reported that it mined the equivalent of 4,032 Bitcoin (CCC:BTC-USD) in calendar year 2021. For the second quarter, the green energy BTC miner also announced revenues of $52.6 million. That was 41% higher sequentially. Finally, the company announced that it had more than 16,000 new miners on order.
At the end of September, Hive had $123.1 million in digital currencies on its balance sheet. That’s about 39% of its total assets. Of the $123.1 million, Ethereum (CCC:ETH-USD) accounted for nearly 61%, Bitcoin around 39% and Ethereum Classic (CCC:ETC-USD) the small remainder.
Between its crypto mining activities and its equity investments in non-fungible tokens (NFTs) and decentralized finance (DeFi), I’m not sure why HIVE stock wouldn’t be more interesting than an e-commerce business that sells tchotchkes from China.
The Last, Healthy Alternative to WISH Stock
Last up is Bright Health (NYSE:BHG), a company that has not had a good experience post initial public offering (IPO). This provider of healthcare plans for individuals, families, Medicare and employers went public at $18 in June 2021. BHG shares have lost 84% of their value since then.
These steep losses have brought out the ambulance chasers. On Jan. 18, the law firm of Holzer & Holzer issued a press release seeking a lead plaintiff for a class action suit against the company. The press release stated the following:
“The complaint alleges Bright Health negligently prepared its Offering Documents and made false and/or misleading statements about its business and financial prospects.”
The reality is that health insurance isn’t an easy gig. UnitedHealth (NYSE:UNH) is one of the world’s largest healthcare companies by revenue for a reason. They’re not about to give up their premium position. Not to mention, its Medical Care Ratio (MCR) of 83% in Q3 was 20 percentage points less than Bright Health’s.
At $18, BHG stock was likely overpriced, hence pricing below the low-end of its IPO range ($20 to $23). At $2.67 per share as I write this, though, the speculative investor is wise to consider dabbling in this one. The risk-to-reward proposition is far greater than holding on to WISH stock.
I wish I had a better opinion of ContextLogic. But, alas, I don’t. WISH stock is a dog with fleas.
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On the date of publication, Will Ashworth did not hold (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.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.