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Gabby Jones / Bloomberg
Actions of
ContextLogic,
which does business as the e-commerce site Wish, fell 16% on Wednesday on the first trading day. The shares were not listed above their initial public offering price of $ 24, which made it a broken deal.
According to the IPO brochure, the San Francisco start-up connects more than 100 million active users a month, in more than 100 countries, with 500,000 merchants selling 150 million items. Most Wish merchants are headquartered in China and usually sell unbranded products at a discount, such as T-shirts ($ 2.20), masks ($ 2.60) or toothpaste gel pens ($ 3 ). According to reports, Wish takes 15% of each transaction.
On Tuesday at the end, Wish (ticker: WISH) raised $ 1.1 billion after setting his deal at the top of his expected range. The e-commerce retailer sold 46 million shares at $ 24 each, top of its range from $ 22 to $ 24. Subscribers to the agreement include
Goldman Sachs,
JPMorgan,
and BofA Securities.
Shares opened Wednesday at $ 22.75 and dropped to $ 19.48. Shares closed at $ 20.05, up 16.5%, giving the company a market capitalization of $ 14.3 billion.
Wish’s unfortunate performance comes just a week from the box office deals
Airbnb
(ABNB) i
DoorDash
(DASH). Airbnb, which grossed $ 3.5 billion with its IPO, rose nearly 113% in its market debut on December 10th. DoorDash, meanwhile, grossed $ 3.37 million and jumped 86% on its first trading day on Dec. 9.
Wish wasn’t the only company to go public on Wednesday.
Upstart Holdings
(UPST) i
BioAtla
(BCAB) also opened up to trading.
Wish moved to take more control of its logistics platform in 2020, said Peter Szulczewski, a former Google executive who co-founded Wish with Yahoo! veteran Danny Zhang in 2010. The retailer previously let his merchants handle his own shipments. But during the twelve months ended Sept. 30, Wish helped ship more than 640 million items to buyers in more than 100 countries. More than 90% of the packages purchased on the platform used Wish’s logistics platform, from scratch in 2016, according to the brochure.
There were several reasons for the change. The retailer was one of the first companies to feel the impact of the Covid-19 pandemic when the supply chain in China fell in January. “No one could predict that,” said Szulczewski, who is Wish’s CEO.
The company also faced changes in global postal regulations and an increase in cross-border sales volume, forcing it to take more control of logistics. And changes to the Universal Postal Union Treaty earlier this year make Chinese Wish merchants likely to face higher shipping rates.
The improvement of its logistics gave Wish “the conviction that the work could do it and the consequences [of it] come out this year as a public company, ”Szulczewski said.
Wish competes against rivals like
Amazon.com
(AMZN) i
Participation of the Alibaba group
(BABA). Both have tried to buy Wish, according to the news. “There are many different types of rumors,” Szulczewski said De Barron. “We are focused on our mission and we love to run as an independent company.”
The start-up has no debt, Szulczewski said. Losses for Wish, however, have expanded to $ 176 million over the nine months ended Sept. 30, compared to $ 5 million in the same period in 2019. Revenues rose nearly 32% to $ 1.7 billion for the nine months ended Sept. 30, from $ 1.3 billion. billion for the period of the previous year.
I wish partners with 50,000 local brick and mortar stores in 50 countries, who have uploaded their inventory to the store to pick them up and deliver them. These stores also serve to pick up online orders from Wish, he said. Many of these locations are small mom and pop stores, and Wish helps them “survive and thrive for a super tough decade,” Szulczewski said. The company wants to add more stores, he said.
Wish also plans to expand into new markets, he said. “Wherever there are consumers aware of the value of smartphones, we want to delve deeper into that,” Szulczewski said. This could include Latin America, Africa or the Middle East, he said.
Write to Luisa Beltran to [email protected]