Wish.com saw its stocks divebomb as much as 16 per cent after launching its initial public offering (IPO) on the NASDAQ yesterday.
ContextLogic, Wish’s parent company, made its trading debut on Wednesday seeing its stock open at $22.75, dropping to an intraday low of $20.05.
This represented a 16 per cent drop from its IPO price of $24 giving Wish a market valuation of around $15 billion on a fully diluted basis.
On Tuesday Wish managed to raise $1.1 billion at its original IPO price of $24 per share, which was significantly more than the $300 million it raised as a private company during its last funding round in August 2019.
Wish’s chief executive and former Google engineer Peter Szulczewski said investors should judge the company on its long-term performance, drawing comparisons to Facebook’s IPO in 2012.
“I was an investor in Facebook early on,” Szulczewski said.
“That worked out well. I don’t think we’re any different than we were when we did our roadshow. I’m not even sure what the stock price is now, but I had gone into this with the strategy of not paying attention to short-term volatility.”
Last month Wish said that revenues grew a third during its most recent quarter, following a whopping 67 per cent sales growth in the previous three-month period.
However, this followed an eight per cent dive in sales during the first quarter of 2020 after “severe manufacturing and supply disruptions” due to the pandemic ground sales to a halt.
This saw the online marketplace, which sells discount items almost exclusively from China, flog more than 640 million items in the 12 months to September, seeing revenues hit $1.7 billion in the first nine months of 2020.