ContextLogic Inc. has been overlooked as another IPO flop, catalyzed by an ongoing lawsuit and lackluster earnings reports. However, Wall Street targets, cash on hand, future expansion and the current put/call ratio suggest an alternative narrative for $WISH.
Perhaps the most notable statistic is ContextLogic's ~0.32 put/call ratio. With greater call volume than many industry competitors, it's hard to say that investors aren't expecting some bullish movement. With an IPO price far above fair value, it's understandable that $WISH has been hit hard. But a valuation at $9.98 (Aug 5, 2021), less than half of its $24 IPO price (Dec 2020), seems like a heavy pullback. With over 2/3 of options traders betting the price will rise – it's easy to guess how the public feels about ContextLogic's future growth.
With deep pockets and an even deeper animosity for retail investors, hedge funds move the market. Galileo (PTC) Ltd, Formation8 GP, LLC and Founders Fund V Management, LLC are a few of the top $WISH hodlers managing over $3.5B USD in investment value. Other notable institutions with bullish positions include JS Capital Management LLC and Morgan Stanley.
Price targets set by corporate analysts put ContextLogic shares at a low of $12.00 (+20.2%), a median of $17.50 (+75.4%) and a high of $24.00 (+140.5%) as of July 2022. It is evident that $WISH currently trades near an all time low, projected to see rebounding heights in the coming year.
The upcoming August 12, 2021 Q2 earnings report will be a significant catalyst for ContextLogic in the short-term. Whether initial traction is up or down – a young, volaltile IPO is bound to see movement as the date nears closer. Analysts predict Q2 to still present a negative EPS value, but this time at -0.14, which is a far cry from the -3.04 EPS back in Q4 2020. If $WISH can beat these predictions and near the breakeven point, the company's $2 billion on hand will propel its growth ventures into EOY.
Disclaimer: I have no idea what I’m talking about.