Should You Buy Wish Stock?

ContextLogic, the company that owns and runs Wish.com, went public in a December 2020 IPO that set stock prices at $24 a share. Eleven months later, in mid November 2021, the stock price sits at under $5 a share.

Is this low sales price the perfect time to get in on WISH, or is it a sign investors should abandon a sinking ship?

ContextLogic's Ongoing Challenges

Wish's parent company has experienced some major bumps this year, and all are the types of challenges that tend to drive share prices down. First, revenues are down. The third-quarter earnings report from Wish showed a 39% decrease year-over-year in revenues, and the company signaled that the fourth quarter would also see a decline. Lackluster revenues expected even in light of holiday spending is not a good sign, and investors definitely took note.

Other challenges for the company include CEO Piotr Szulczewski stepping down early next year and supply chain issues. Wish's business is heavily predicated on shipping third-party Chinese merchandise from China into the United States. Current logistics slowdowns, warehouse woes and marooned container ships waiting for a port to call home are negative factors on the business's bottom line (and stock price).

Wish's Staying Power

Does that mean Wish is sinking and there's no hope of a revival? Some Wall Street analysts have moved WISH into the "hold" column for investors — meaning they advise a wait-and-see approach to selling.

That's due in part to Wish's hefty cash reserves. The company isn't running out of money soon, and it can afford to play a game of siege with its supply chain. Plus, other companies have sprung up and experienced success with the same model, including Alibaba. That indicates there's a consumer desire for the service and its products.

In a Nutshell

Whether or not Wish can make a resurge remains a question, and experts are falling to either side with answers. If you already have WISH stock, you could choose to hold it through the holidays to see what happens. If you don't, buying it is definitely a gamble.