Shares of discount e-commerce marketplace Wish fell more than 13% in the company’s market debut Wednesday…
The opening trade was $22.75 per share, below its IPO pricing of $24 per share, which was at the high end of expectations. The offering raised $1.1 billion and gave the company an initial valuation of more than $14 billion. Private investors valued the company at $11.2 billion.
ContextLogic, Wish’s parent company, filed to go public last month. Last week, the company estimated that it would price shares in the range of $22 to $24, and on Tuesday it priced at the top of that range.
Wish, founded in 2010 by former Google engineer Peter Szulczewski, is an online marketplace that features a variety of discounted goods, ranging from cheap home wares and apparel to electronics and toys. The app offers a slew of products for just a few dollars as a way to target low- to middle-income consumers with more affordable options than they can find on other sites, including Amazon.
The company’s reputation for selling discounted knickknacks has earned it comparisons to an online dollar store. But Szulczewski told CNBC on Wednesday that he believes Wish’s “value is much higher.”
“We focus on delivering as much value for our consumers as possible, and that’s served us well,” Szulczewski told David Faber on “Squawk on the Street.” “We believe this is an underserved demographic.”
Wish is going public at a time when online sales are soaring, as the coronavirus pandemic has pushed more people to avoid making trips to stores in favor of shopping safely at home on their smartphone. The trend has led rival e-commerce companies like Amazon, Shopify and Etsy to be some of the biggest beneficiaries of the pandemic.
The company’s IPO prospectus revealed it’s experiencing slower growth, from a much smaller base, than online retail counterparts like Amazon and Walmart. Wish reported $1.75 billion in revenue for the nine months ended Sept. 30, a growth rate of 32%, while Amazon posted first-party sales growth of 38% year over year to $48.4 billion in the third quarter. It lost $176 million in the first nine months of 2020.
The offering comes on the heels of…
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