It’s beginning to look like “WISH Week” as I find myself again presented with the unenviable task of writing again about ContextLogic (NASDAQ:WISH) stock. I hope you believe me that I’d rather not do it. However, the analytics show an intense interest in this deeply embattled e-commerce firm. So, here I am.
Still, I’m not completely unaware to the point where I don’t realize the frustration you may have about another story warning you off from ContextLogic. This reminds me of some controversial statements that ESPN sports analyst Stephen A. Smith made during last year’s baseball season. Personally, I think the controversy stemmed from how he said what he said, not the substance of it.
Nevertheless, this is the internet age. The internet got angry and Smith apologized for his “wrong” opinion. It should be a done deal. But again, some sports editorialists months later lashed out at Smith for the same wrong opinion. It’s over. Let’s stop nursing this beer and move on. Thus, I understand your frustration about the coverage of WISH stock.
But the difference between Stephen A. Smith and ContextLogic is that people still want to read opinions about the latter, even if said opinions are almost surely guaranteed to incite anger among those hopeful for a recovery in WISH stock.
I’m caught between a rock and a hard place.
It’s not that I dislike WISH stock nor do I have a position in the security. Rather, I’m having a difficult time understanding how an e-commerce platform that specializes in cheaply priced goods (mainly from China) can lose 40% of its monthly active user (MAU) base to 60 million and still justify a bullish outlook.
When you’re a high-volume business and you lose volume, that would normally be a cause for concern.
Ardent Fanbase Fuels WISH Stock
As we have seen throughout the new normal, fundamentals don’t necessarily have to make sense for their associated securities to skyrocket. For instance, as of this moment, data from CoinMarketCap shows that there are over 17,000 cryptocurrencies available for trading.
Are all these cryptos going to succeed? Never say never, but I think we can say never in this case — it’s mathematically impossible. But that hasn’t stopped people from speculating on certain coins and tokens and that speculation alone has generated incredible profitability for a lucky few.
Final example: I’m sure you’ve all heard about the girl selling her emissions so to speak and apparently, turning them into non-fungible tokens. If you can sell that, my friends, WISH stock can rise from the muck.
However, the probability is low in my opinion. Regarding the emissions story, the demand is not necessarily for the flatus but for the woman. She is selling a piece of herself (literally) to satisfy strange and possibly deranged desires. If I were law enforcement, I’d probably want an audit on who’s buying this stuff.
But the point is that the smelly jars represent a play on eroticism — a very powerful emotional and business catalyst. On the other hand, what’s the catalyst for WISH stock? Mainly (again, in my opinion) speculation that other people will speculate on it.
I’m not necessarily going to criticize this tactic because that’s how you can make money on junk cryptos like canine-themed meme coins. But when the sentiment finally fades, it could be an ugly thing indeed. In fairness, though, I would have thought a trailing one-year loss of 90% would yield sobriety.
Judging from social media posts, there are apparently quite a few believers attempting to pump WISH stock, so the drama isn’t over yet.
Learn the Lesson and Run
In the very fine film The Equalizer 2, Denzel Washington, playing a gentleman named Robert McCall, coincidentally stated some appropriate words for WISH stock. “There are two kinds of pain in this world. The pain that hurts, the pain that alters.”
It’s obvious that WISH stock has imposed the pain that hurts. But it’s not quite apparent whether ContextLogic has administered the pain that alters.
Psychologically, the concern is this — we’re already deep in the smelly stuff. So, what magnitude of pain will lead to McCall’s forecasted alteration? A loss of 95%? Or 99%? Or so asymptotically close to 100% that it might as well be that?
The thing is, I don’t think you should be stretched to the point where you find out the hard way. Therefore, if you find any opportunities to cut losses at more palatable rates, I would think very hard about taking the deal.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.