Wish, a once-popular online marketplace for a vast array of often bizarre, inexpensive goods that at one juncture proved to include phantom listings, has conducted a 1-for-30 reverse stock split, a move typically associated with distressed companies in danger of being delisted from an exchange.
The move was approved at the company’s annual shareholder meeting last week in San Francisco. ContextLogic Inc. does business under the name Wish. Reverse splits became common in the days of the dotcom bust of the early 2000s, when dozens of internet startups failed.
“The reverse stock split is intended to enable the company to regain compliance with the minimum bid price requirement for continued listing on the Nasdaq Global Select Market,” the company said in a release announcing the move.
The New York Times did an expose on Wish in July of last year, reporting that it had set up a scam seller account called “bestdeeal9” to list and sell items that it knew didn’t exist. The shop was shut down in 2020 after employees and customers complained.
Wish claims on its site to be “revolutionizing the way consumers shop by providing a personalized and entertaining experience that is accessible to all through their mobile devices.” All kinds of interesting trinkets are available on the marketplace, with skulls and various items with colorful pronouncements two fairly common motifs. A mini car spoiler wing inches long can be had for $1.81.
Wish, which went public in mid-December 2020 at a valuation of $14 billion, hit a share price peak of $902.10 in late January 2021, which has slid down steadily since. Before the reverse split, the stock was at 30 cents a share, and since has been trading in the $7-$8 range.
For the fourth quarter of 2022, Wish reported revenue of $123 million, a 57% decrease from the prior year, and marketplace revenue that dropped 74% to $36 million. The adjusted EBITDA loss was $95 million, more than quadrupling the $23 million from 2021. Wish is projecting a Q1 loss by that same metric of $70 million to $80 million.
“Despite a dynamic and challenging macroeconomic environment, 2022 was a productive year for Wish as we continued the journey of transformation we initiated a year ago,” said Wish CEO Joe Yan in the news release. “While we are still in the early stages of the turnaround, I’m energized to see the tremendous progress across each of the foundational pillars.”
Yan, an operating partner with Wish investor GGV Capital based in Singapore, was brought on in September to replace Nike and Foot Locker veteran Vijay Talwar, less than a year into his tenure. Talwar had in turn replaced Wish co-founder and CEO Peter Szulczewski, a former Google software engineer.