WISH Stock Price: ContextLogic Inc gains and outpaces the broader markets
- NASDAQ:WISH gained 1.16% amidst a broader market selloff.
- It’s hard to imagine a profitable road ahead for ContextLogic.
- Another eCommerce platform blows its earnings out of the water on Tuesday.
NASDAQ:WISH continues to exhibit counterintuitive behavior as a stock. On Monday, as stocks rallied from early declines, WISH fell nearly 10%. On Tuesday, as the markets sold off due to weak retail numbers and rising Delta Variant cases, WISH gained 1.16% and closed the trading session at $6.95. Don’t confuse this with relative strength though, the stock was amongst the most discussed companies on Reddit’s r/WallStreetBets discussion forums today, and it’s clear that retail investors are blindly buying the dip. Does WISH have a chance of rebounding from its recent lows? Sure, which is probably why some traders are treating it as a swing trade. But looking out to the long-term, ContextLogic has a long list of issues that will make further growth difficult to achieve.
ContextLogic already sank across all notable growth metrics in the second quarter. There were numerous headwinds which the CEO covered in his letter to shareholders. Some of these included, higher advertising costs, costly logistics network expansion, and a higher rate of returns on low quality products. The quality of products will always be an issue for ContextLogic, as will its reliance on nearly 90% of its sellers being based out of China. In a world where companies like AliBaba (NYSE:BABA) and Amazon (NASDAQ:AMZN) are working on global 2-day delivery, ContextLogic still has incredibly long wait times for its product shipping.
Is WISH a good stock to buy
It’s hard to look at WISH as a good investment right now when companies like Sea Limited (NYSE:SE) are reporting blowout quarters. While the company reported slightly larger losses than expected, Sea Limited did confirm its first quarter of over $2 billion in revenues, as well as raising guidance for the rest of 2021.
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Stocks Reporter
FXStreet
