ContextLogic (WISH), the parent company of e-commerce retailer Wish, is expected to be the last initial public offering this year to raise more than $1 billion, following the strong performances of DoorDash (DASH) and Airbnb (ABNB). The Wish IPO trades sometime Wednesday.
San Francisco-based ContextLogic, which goes by the name Wish, raised $1.1 billion late Tuesday, offering 46 million shares at $24, the high end of its estimated price range of $22 to $24. That gives it a fully diluted market valuation near $17 billion.
The popular e-commerce company says it appeals to “value-conscious consumers.” It carries products from more than 500,000 merchants, mostly from China, offering some 150 million items. Wish has more than 100 million monthly active users.
“We launched Wish with a simple mission — to bring an affordable and entertaining mobile shopping experience to billions of consumers around the world,” the company said in the Wish IPO filing. “We are focused on democratizing mobile commerce by making it affordable and accessible to anyone.”
For the nine-month period ended Sept. 30, Wish reported revenue of $1.75 billion, up 33% from the year-ago period. It reported a loss of $120 million vs. $24 million a year ago.
Wish IPO Draws High Investor Interest
IPO research and advisory firm IPO Boutique, says the Wish IPO is “multiple times oversubscribed,” meaning the request for shares is above what’s being made available. It expects the offering will price at the high end of its range.
The IPO market in 2020 is on pace to be the busiest year since 2014, and recently wrapped up the long-awaited, multibillion-dollar offerings from DoorDash and Airbnb. That momentum is expected to continue in 2021. Two other large IPOs that were expected to occur in December, Roblox and Affirm, have reportedly been pushed into next year.
The number of IPOs priced this year thus far is 213. That’s up 36% from the same period last year, according to Renaissance Capital. In addition, they’ve raised $78 billion in proceeds, up 69%, reflecting the higher number of larger public offerings.
Some of the big names this year included Snowflake (SNOW), which raised $3.4 billion and set a record as the largest U.S. software IPO deal ever. Also, Royalty Pharma (RPRX) raised a whopping $2.2 billion in June, the largest offering for 2020 at that time.
The underwriters of the Wish IPO are Goldman Sachs and JPMorgan.
Investing In IPO Stocks
Recent IPO stocks are where you often find some of the market’s best stocks. New IPOs are typically in their early stages of growth. Moreover, it’s big earnings growth that generally fuels a stock’s price performance.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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