WISH Stock Alert: Citron Research Sends ContextLogic Soaring

  • Citron Research is bullish on ContextLogic (WISH).
  • The short seller cites the company’s healthy liquidity stance and improvement in management.
  • WISH stock is up by 79% year-to-date amid the news.
WISH stock - WISH Stock Alert: Citron Research Sends ContextLogic Soaring

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Shares of ContextLogic (NASDAQ:WISH) closed higher by 37% following an encouraging note from short seller Citron Research. The news was well-received by shareholders of WISH due to Citron’s usually bearish takes.

The short seller noted after watching the Super Bowl, he now believes that Wish offers the “most assymetrical [sic] opportunity in the market.” He attributes this to the success and introduction of Temu, a subsidiary of Pinduoduo (NASDAQ:PDD), into the U.S. market. Temu was featured in two Super Bowl ads and is also the number-one most-downloaded app on Apple’s (NASDAQ:AAPL) app store.

Citron believes that Temu has led the success of the “surprise discovery e-commerce model,” which Wish can also capitalize on due to its similar business model. Furthermore, despite similar business models, WISH trades at an enterprise value of negative $450 million.

Citron Research Is Bullish on WISH Stock

Citron also lauds Wish’s liquidity. As of Q3, the e-commerce company had $832 million in cash, zero debt and $280 million available through a line of credit. This would mean that the company “likely has multiple years of liquidity available.”

Wish has also added executives from Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG, NASDAQ:GOOGL) and Alibaba (NYSE:BABA) to its management team. The expertise from these new additions furthers Citron’s thesis that WISH is a great bet.

The company is slated to report its fourth-quarter and full-year results on Feb. 23 after the market close. Citron believes that this will mark a major inflection point for Wish. On average, analysts are expecting revenue of $152.02 million, down by 47.4% year-over-year, and an earnings per share (EPS) loss of 18 cents. ContextLogic reported an EPS loss of nine cents a year ago.

Earlier this month, Wish announced all U.S. customers would be eligible for a flat-rate shipping fee of $2.99 for orders over $10. The rate is currently available for U.S. customers and will be “rolled out in phases” to other markets by the end of March. In the past six months, on-time delivery rates have tallied in at 94%.

Lastly, Citron has disclosed it will soon release a bullish report on Wish.

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On the date of publication, Eddie Pan held LONG positions in AAPL, AMZN, and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2023/02/wish-stock-alert-citron-research-sends-contextlogic-soaring/.

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