Short Selling

The Short Selling Wave Is Not Over for $WISH Post Insiders’ Exits

Dec ‘20 welcomed a promising start for ContextLogic Inc. (NASDAQ: WISH), a Mobile Ecommerce company operating in Europe, North America, as well as Internationally. The company completed its IPO on December 16, 2020, where it raised nearly 1.1 billion USD with the sale of 46 million shares at a value of $24.00 each.

But since then, the stock as well as the company itself has been taking deep blows. These included unfavorable news surrounding the company operations, combined with insiders selling out stock they owned.

On February 01, 2021, $WISH scored it's all-time high price of $31.19. The same day the company’s M.Cap soared to $18.31 billion. It later, however, took a dive of -83.26% in the past year. Currently, the price is standing at $3.22 after several bounces.

Short Selling combined with Insiders’ Exits

The company currently holds a utilization rate of 67.69%, which is significantly lower than in the past. The E-commerce company saw high utilization rates frequently post its IPO, and several times hit 100%, on May 13, 2021 and June 16, 2021.

Presently, the company has 67,796,864 shares on loan. The loan volume % of shares outstanding is 11.75%, and loan volume % of float is almost 20.26%.

On December 17, 2021, five insiders filed Form 4 selling the $WISH stocks they owned. These included:

  • Brett Just - CFO
  • Liu Pai - Vice President
  • Jacqueline D. Reses - Director
  • Devang Shah - Gen. Counsel/Secretary
  • Piotr Szulczewski - Founder/Chairman/CEO

The Insiders sold 142,887 shares, worth a total of $440,649.

Different short selling measures are depicted in this diagram, which gives shorting statistics.

Where the Cracks began

On March 08, 2021, ContextLogic reported rather dismal financial results for its Q4 and fiscal year 2020. Also, the monthly active users on the company’s e-commerce platform, Wish, had declined by 10%. The company responded by saying that it had not focused enough on gaining more customers and advertising services in other diverse regions aside from Europe and North America.

Later, law firm, Pomerantz LLP, announced on June 30, 2021 that it was investigating ContextLogic on behalf of the latter’s investors. The proceedings were to determine whether or not the company’s officers and directors had participated in securities fraud or unlawful business practices.

Moving forward, things still looked bleak for the company’s recovery as a whole. On December 07, 2021, an article listed five reasons why $WISH was a red flag.

One of the reasons was France’s banning of Wish on its search engines and app stores, because the platform sold products that didn’t comply with EU standards. Additionally, the company’s insiders sold more stock than they purchased. These included the company’s Founder and CEO, Piotr Szulczewski who announced his decision to step down from Nov ‘21.
ContextLogic outperformed the market on Monday, January 3, 2022, rising by 3.45%. The question remains whether 2022 can be a comeback from the bearish zone for the company - both performance and stock wise.

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