Let’s not mince words. There are a number of loose ends with California-based ContextLogic (NASDAQ:WISH) which ought to be tied up by now, but haven’t been. Without a doubt, it must be frustrating to own WISH stock in hopes of fresh, material updates, only to be disappointed day after day.
For example, it was revealed on November 10, 2021, that Piotr Szulczewski will step down from his position as ContextLogic’s CEO. This is a really big deal, as Szulczewski is the company’s founder and he served as its CEO for over a decade.
Concerning the announcement of a replacement, it has only been radio silence so far. This is only one of a number of worrisome and exasperating issues that WISH stockholders have had to deal with.
Brace yourself, as we’re now going to delve into one of the worst-performing stocks you’ll find on InvestorPlace. It’s not even a pop-and-drop; it’s more like a drop-and-drop-some-more.
WISH Stock at a Glance
It seems like a distant memory now, but WISH stock cost $32 per share a year ago. Those were good times, but they weren’t meant to last.
In May 2021, the stock fell below the critical $10 level. The suffering didn’t end there, though, as the ContextLogic share price declined to $3 and change by the end of the year.
Value hunters might have tried a “buy low, sell high” strategy at that point, but WISH stock just couldn’t find its footing. Appallingly, the stock was trading at just $2 and change in late January 2022.
There are no meaningful support levels to speak of here. After all, a stock actually has to bounce in order to establish support.
Therefore, instead of trying to find value where there really is none, it’s better to focus on WISH stock’s momentum. Clearly, the momentum is to the downside, and there’s no reason to believe that a turnaround is imminent.
Bad Products on the Platform
In the world of e-commerce, reputation is everything. When the customers can’t trust a platform’s products, the business will inevitably suffer.
This seems to be happening with ContextLogic’s e-commerce site, Wish.com. The ugly truth of the matter is that this platform emphasizes low prices but not high quality.
In other words, the goods are cheap and heaven only knows whether the customers will receive anything resembling what’s advertised. It’s so bad that French authorities have actually ordered search engines and online platforms to remove Wish.com from their listings over concerns about product safety.
InvestorPlace contributor Faizan Farooque concisely summed up the nasty details, saying, “Based on their study of 140 products from Wish online, the authorities deem that 45% of toys are unsafe and 90% or more of electronic goods are hazardous. They also noted an alarming rate of cheap costume jewelry.”
No Need to Wait and See
Graciously, Farooque recommended employing a wait-and-see approach with ContextLogic. His politeness is certainly commendable, but we don’t have to be so charitable with this failing company.
Take a look, if you will, at ContextLogic’s press releases page. Is there anything worth reading there? The most recent update is from December of last year.
That update, by the way, concerns the installation of a vending machine in Times Square. No, we’re not kidding — it’s a press release about one vending machine.
Meanwhile, there are more pressing issues that ContextLogic needs to attend to immediately. Besides Wish.com’s apparently poor product quality, the company should try harder to fix its fiscal problems.
The data paints a dreadful picture. ContextLogic’s revenues sank from $606 million in 2020’s third quarter, to $368 million in the third quarter of 2021.
Turning to the bottom-line results, ContextLogic posted a net earnings loss of $175 million during 2020’s first nine months. Even worse than that, the company reported a $292 million net earnings loss in the first nine months of 2021.
The Takeaway
There are a number of reasons to completely avoid WISH stock. Among them is the stock’s rapidly deteriorating value.
Furthermore, ContextLogic’s financials are problematic. Plus, there’s a lack of recent, important press releases.
On top of all that, there are justifiable concerns about the product quality of the Wish.com platform. All in all, the outlook is negative and there’s no defensible argument to support an investment in ContextLogic.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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