In another sign of the strength of initial public offerings (IPOs) right now, eCommerce site Wish has sold shares to investors at the top of its price range, the Financial Times (FT) reported.
ContextLogic, which does business under the name Wish, priced IPOs at $24 a share, according to unnamed sources quoted by FT, which was the upper tier of the company’s $22 to $24 price range. This helped Wish raise $1.1 billion and gave it an implied market capitalization of $14 billion.
Wish, which is based in San Francisco and was founded in 2010 by ex-Google engineer Peter Szulczewski, runs an online marketplace known largely for selling discounted items from China. The company, according to FT, usually caters to low- to middle-income customers, with the company saying its proprietary algorithms work to personalize users’ feeds. That has seemed to work so far, netting Wish around 1.8 million sales a day.
In the first nine months this year, Wish reported deepening net losses, rising from $5 million in that same period last year to $176 million over the course, FT reported. The company said it made over $1.7 billion in revenue in that first nine months.
The price range implied a lower market capitalization than some bankers had thought before, with the previous estimates having risen to $25 billion to $30 billion. Investors have previously valued the company at $11 billion, FT reported. The price Wish trades at on Wednesday (Dec. 16) will be closely watched, though, in correlation with the ways Airbnb and DoorDash experienced large first-day trading surges that surprised investors.
Wish filed its IPO for $1 billion in November, PYMNTS reported, with the IPO led by Goldman Sachs, J.P. Morgan Chase and Bank of America. Wish is the third-largest eCommerce marketplace in the U.S., and it was the most-downloaded shopping app in the world in 2018. Over 70 percent of the sales on Wish didn’t involve a search query.
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