(Bloomberg) — Online retailer Wish fell in its trading debut Wednesday, in a far more muted start to life as a public company than for DoorDash Inc. and Airbnb Inc. last week.
Shares of Wish opened at $22.75 apiece, below the $24 they were sold for in its initial public offering. Wish was valued in the listing — which priced at the top of the marketed range — at about $17 billion on a fully diluted basis, which includes options and restricted stock units as well as the outstanding shares listed in its filings.
The shares were down 12% to $21.21 at 1:58 p.m. in New York trading.
The offering is the 31st on a U.S. exchange to exceed $1 billion this year, according to data compiled by Bloomberg. It follows last week’s blockbuster trading debuts by DoorDash, which soared 86% after its $3.14 billion offering, and, Airbnb which closed its first day up 113% after a $3.83 billion IPO including so-called greenshoe shares.
“We are focused on getting the right value and getting the right investors on board to really allow us to pursue our long-term vision,” Peter Szulczewski, chief executive officer of Wish parent ContextLogic Inc., said in an interview before trading started.
Shares of both DoorDash and Airbnb have fallen this week, which may have been a factor in the lukewarm reception for Wish, said Kathleen Smith, principal and manager of IPO exchange traded funds at Renaissance Capital. Smith said the performance of last week’s listings “teaches investors a lesson” about buying at the open.
Wish is also part of a competitive landscape. While e-commerce stocks have traded well this year, some investors compare Wish to Amazon.con Inc., which Smith said has a similar growth rate. “If I can own Amazon, why should I own Wish?” she added.
At its IPO price, Wish trades at about four times its projected 2022 sales, according to a person familiar with the matter. Amazon trades at 3.6 times its 2021 sales estimates, according to data compiled by Bloomberg. EBay Inc. trades at 3.37 times the same metric. A representative for Wish declined to comment.
Including Wish, more than $22 billion has now been raised in IPOs on U.S. exchanges in December — a record for the month. The 2020 total is now more than $174 billion, also an all-time high, the data show.
Two other consumer-oriented, web-based companies, online video-game company Roblox Corp. and installment loans provider Affirm Holdings Inc., are also pursuing IPOs. Roblox told its employees that it was delaying its IPO until next year. Affirm hasn’t publicly set a date for its listing.
Wish differentiates from other online retailers by focusing on value conscious consumers, according to its filings.
Founded in 2010 by Szulczewski and Danny Zhang, who met at the University of Waterloo in Ontario, Canada, Wish connects sellers to potential buyers of everything from clothing to electronic goods and kitchenware. ContextLogic owns other online marketplaces, including Geek, Mama, Home and Cute, according to the Wish website.
Wish’s losses, as well as its sales, have increased during the coronavirus pandemic, according to its filings. It had a net loss of $176 million on revenue of $1.7 billion during the first nine months of this year, compared with a net loss of $5 million on revenue of $1.3 billion during the same period in 2019.
Wish’s parent company, San Francisco-based ContextLogic, sold 46 million shares Tuesday for $24 each, raising $1.1 billion. The offering was led by Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. The shares trade on the Nasdaq Global Select Market under the symbol WISH.
(Updates with CEO’s comment in third paragraph)
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