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$WISH – Quick DD, Should We Be Concerned?

**ContextLogic Inc. – $WISH**
**Research**

**Analyst Ratings**

* 11 covering the stock
* 8 buy
* 3 hold
* Low: $12.01 (2.1% upside from current levels)
* High: $24.00 (104.3% upside from current levels)
* Median: $19.00 (61.7% upside from current levels)

**Financials**

* First-quarter loss of $128 million (0.21 per share) Q1 2021
* Sales $772 million Q1 2021
* $66 million loss on $440 million sales Q1 2020
* Sales & marketing expenses totaling $470 million vs. gross profit of $437 million
* Gross profit at $437 million is up from $156 million in the same period 2020
* As revenue grows and costs decelerate, can become profitable
* Very similar in many ways to the growth stories of Amazon or Snowflake
* Initiatives to increase merchant base
* Partnership with PrestaShop, allowing over 300,000 merchants to have access to WISH customer base
* In all market outside of China, merchant base more than quadrupled in Q1 2021 vs Q1 2020
* US merchant count nearly tripled during the same period
* Institutional Ownership (48.68%)
* Morgan Stanley $106 million investment, with 2 MS mutual funds investing an additional $67 million
* Temasek (Singaporean wealth fund) invested $424 million
* Charles Schwab, Susquehanna International Group, Ameriprise Financial, **Citadel, Point72**, JP Morgan Chase, Founders Fund V Management Portfolio
* IPO priced at $24, opened at $22.75, raised $1.1 billion at initial valuation of $14 billion
* Insiders valued WISH at $11.2 billion
* Nine months ending Sept 30 2020, WISH reported $1.75 billion in revenue (32% growth rate), losing $176 million during this same period
* Experiencing slower growth than rivals Amazon & Walmart (Amazon first party sales grew 38% YoY to $48.4 billion in Q3 2020.

**Management**

* Jacqueline Reses: newly appointed Executive Chair
* She’s literally the best and her resume speaks for itself
* goldman sachs, yahoo, square, alibaba, fed reserve bank sf, virgin galactic, pershing square
* CFO Rajat Bahri recently resigned
* Finance team screwed up RSU settlement, resulting in losses to employees and forcing insider selling to cover taxes due to a gap between the settlement date and the sell-to-cover date
* Most likely resigned amicably as part of undergoing management transformation (new addition of Jackie Reses with a long resume in the financial industry)

What do you think?

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35 Comments

  1. I’ve had a majority of my portfolio in VTI and QQQ. After doing dd on Wish, I ended up putting 1/3 of my portfolio into WISH. I can easily see this as a stock that keeps growing after 2-3 years

  2. I’m loading on this one. Way too undervalued at the current market cap of just over 7 billion. Revenue growth is conservatively above the 30% mark year on year with about 2.5 billion in revenue last year. Time to make a couple of tendies here!

  3. Jackie Reses jumping in is a big deal. she did her DD and see’s the value/opportunity. She would NOT take this role for just any random company.

    ​

    u/jreses Hi Jackie! take us to the moon!

  4. There is still an analyst that has an $80 price target on Enron.

    They recognize gross revenue in their logistics business so you can remove 85% sales/revenue in your calculations. Will help with book value and why you see such a large increase in rev though still have massive losses.

  5. Kahn Swick & Foti, LLC are looking for a lead plaintiff in a WISH class action suit.

    ContextLogic Inc. (WISH)
    Class Period: 12/16/2020 – 5/12/2021, or purchase of shares issued either in or after the December 2020 Initial Public Offering
    Lead Plaintiff Motion Deadline: July 16, 2021
    SECURITIES FRAUD, MISLEADING PROSPECTUS

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Response to Jackson Palmer. Shibez get behind me on this one