The parent company of Wish has seen its stock deeply discounted since its initial public offering, and the price was slashed yet again in after-hours trading Wednesday.
ContextLogic Inc. WISH,
Wish went public at the end of last year at a price of $24 a share, but fell lower than that price on its first day of trading and has traded steadily lower than the IPO price since mid-February. Shares closed Wednesday with a 2.6% decline at $11.47, and dropped more than 12% in after-hours trading following the release of the results.
In a letter to shareholders, Wish — which has advertised heavily in the past on platforms such as Facebook Inc. FB,
Executives also pointed to effects of the COVID-19 pandemic on its top customer targets, budget-minded consumers.
“We are confident we are making the right strategic decisions to grow our business for the long term,” Chief Executive Piotr Szulczewski and Chief Financial Officer Rajat Bahri wrote in the letter to investors. “Last year, the value-conscious consumer demographic was disproportionately affected by the pandemic. As the economy starts to recover, we believe macro trends will have a positive impact on our business.”
Wish’s forecast failed to live up to analysts’ expectations as well, however. Executives guided for second-quarter sales of $715 million to $730 million, while analysts on average were projecting $759 million, according to FactSet. The company also announced that former Square Inc. SQ,