ContextLogic, which is the parent company for eCommerce giant Wish, saw shares fall 16.4 percent Wednesday (Dec. 16) for the company’s market debut, CNBC reported.
The opening trade was $22.75 per share, which ended up below the $24 per share initial public offering (IPO) pricing, which the company had priced as high as it could.
Wish, founded in 2010 by former Google engineer Peter Szulczewski, has become known as a market for low- and middle-class shoppers, gaining it a reputation as an online dollar store, CNBC reported. The company has become one of the U.S.’s largest eCommerce marketplaces, which has become especially relevant as the pandemic has driven people to shop online more than they ever have.
But Szulczewski said he thinks the value for the company is underrated, CNBC reported.
“We focus on delivering as much value for our consumers as possible, and that’s served us well,” Szulczewski told David Faber on CNBC’s “Squawk on the Street.” “We believe this is an underserved demographic.”
The company chose to go public at a time when IPOs are going strong. Other online sensations like Airbnb and DoorDash have skyrocketed after their debuts.
For the first nine months of 2020, Wish reported $1.75 billion, which represents a 32 percent growth rate, CNBC reported.
But PYMNTS reported that there were deepening net losses, with the company seeing $176 million in that nine-month period, a mass increase from the $5 million at the same time period from 2019.
The company filed for its IPO in November, with backing from Goldman Sachs, J.P. Morgan Chase and Bank of America. Wish priced its shares at $24 earlier this week, which helped garner $1.1 billion with an implied market capitalization of $14 billion, PYMNTS reported.
But the price range forecasted a lower market capitalization than bankers had previously estimated, with some of them predicting Wish would see $25 billion to $30 billion.
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