Wish was sued by shareholders, and its stock price fell by nearly 70%!

As the former North American e-commerce giant and the American version of "Pinduoduo", Wish's sharp drop in price on its first day of listing seemed to foreshadow that Wish's future path would be difficult, and this is indeed the case!

Wish was sued by shareholders!

Recently, news that a U.S. law firm filed a class action lawsuit on behalf of shareholders of ContextLogic Inc. (NASDAQ: WISH) went viral among Wish sellers.

A U.S. law firm announced that it has filed a class action lawsuit on behalf of shareholders of Wish's parent company, ContextLogic, alleging that the company violated federal law. The lawsuit was filed in May and the deadline for lead plaintiffs is July 16.

The complaint filed by the law firm alleges that throughout the Class Period ( December 16, 2020 to May 12, 2021 ) , defendant ContextLogic made materially false /misleading statements and failed to disclose material adverse facts about the company's business, operations, and prospects .

Specifically, ContextLogic failed to disclose to investors that: ContextLogic's monthly active user base declined significantly in the fourth quarter of 2020 , and did not grow at the time ! Therefore, ContextLogic is suspected of seriously exaggerating the company's business indicators and financial prospects.

At the same time, the law firm also urged all investors who purchased ContextLogic Inc. stock and suffered losses to contact the company and join the case! It has to be said that this lawsuit against Wish is really fierce!

Wish's stock price is sluggish

In December 2020, ContextLogic completed its initial public offering, selling 46 million shares at $24 per share. But since its listing, Wish's stock price has continued to plummet!

On March 8 of this year , ContextLogic announced its financial results for the fourth quarter and fiscal year 2020 ending December 31, 2020, and disclosed that as of its IPO in December 2020, Wish's MAU had "decreased 10% year-on-year" to 104 million. In response to this news , ContextLogic's common stock price fell by $1.83, a drop of more than 10%.

In April, Wish's stock price was halved four months after its listing. After announcing its first quarter 2021 results on May 12 this year (MAU fell another 7% to only 101 million), its stock price fell again by $3.36, a drop of about 29% . As of June 1, Wish's stock price had fallen by two-thirds, a drop of nearly 70%.

Image source: Futu NiuNiu

Wish was very popular before , but now some sellers said: "Now Wish has been changed to an Amazon group, and I haven't chatted in the group for a long time." Another seller said: "The platform cannot blindly exploit sellers, and fines are not a means of profit." The consequence of Wish's practice is that many Wish sellers have now withdrawn or switched to other platforms.

What the future path of Wish should take is indeed something that Wish needs to think carefully about!

Wish

share price

Seller