One of the big downside movers in today’s market is popular e-commerce platform ContextLogic (NASDAQ:WISH). Shares of WISH stock have declined more than 5% at the time of writing on news that popular Twitter influencers were charged with running a purported $100 million pump-and-dump scheme. Atlas Trading, a group that utilized social media to put forward stock picks during the meme-stock craze last year, pushed up various stocks, including that of ContextLogic.
This drop is notable because it also comes on the same day ContextLogic announced plans to lower costs for buyers on its core e-commerce platform. At the company’s 2022 Global Merchant Summit, ContextLogic outlined its vision for the upcoming year. Reducing shipping costs, improving loyalty programs and various offers were discussed as ways to boost sales. These moves appear to be aimed at improving the company’s trajectory moving forward.
In light of this mixed news today, let’s dive into what investors should make of ContextLogic moving forward.
Why Is WISH Stock Continuing to Decline?
This ongoing U.S. Securities and Exchange Commission (SEC) investigation certainly doesn’t bode well for the individuals behind Atlas Trading. However, for ContextLogic, additional scrutiny may arise as a result of these charges. While nothing has yet to come out on this front, investors appear to be steering clear of any stock involved. It’s a risk-off market, so this sentiment certainly makes sense.
Additionally, the fact that the Wish platform is aimed at lower-priced purchases is now not necessarily a catalyst for the company anymore. When prices were more stable, and margins could be assured, the company was seen as a key growth engine. However, in times of inflation, this view has markedly changed. Thus, investors appear to see less of a probability that the company can be profitable soon. That’s not a great thing for this stock.
Like other turnaround stories in the market, investors appear to be losing their patience with WISH stock. Indeed, perhaps the company can turn things around. However, until some sort of meaningful progress is made on this front, most investors appear keen on steering clear of this stock for now.
On the date of publication, Chris MacDonald 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.