ContextLogic (NASDAQ: WISH) stock price has crashed close to a record low as concerns about the company continues. The shares plunged to a low of $5, which is over 99% below its all-time high. This plunge has brought its total market cap to over $126 million, down from its record high of over $18 billion.

ContextLogic was one of the fastest-growing companies a few years ago as customers cheered its cheap products. At its peak, the parent company of Wish.com was valued at over $18 billion, making it one of the biggest e-commerce companies in the world.

Recently, however, Wish.com has come under intense pressure as the number of active users has plunged from over 100 million during the pandemic to less than 20 million. In the most recent quarter, the company said that it had 11 million monthly active users globally. Users crashed by 54% YoY in this period.

Total revenue has also plunged hard. Its annual revenue peaked at over $2.5 billion in 2020 and has now dropped to $357 million TTM. It had $571 million in 2022, signaling that the situation is not doing well.

ContextLogic revenue in the third quarter plunged by 52% YoY as its key segments like core marketplace, product boost, and logistics struggled. Its gross profit also dropped by 59% YoY to $14 million while net loss came in at $80 million.

Wish.com faces numerous challenges ahead. The biggest one is that it is competing with moneyed companies that are growing at a fast pace. Temu, which is owned by PDD Holdings, is seeing robust growth as the company spends billions in marketing.

Shein is also seeing a lot of growth and is valued at over $90 billion. This makes it one of the leading companies in the world. Shein and Temu have mastered the global supply chain and will likely continue taking market share from Wish.com.

Wish has also become a highly dilutive company as the number of outstanding shares has jumped to over 24 million from its IPO’s level of 15 million. It will likely continue to dilute its shareholders as its loss-making streak continues.

WISH chart by TradingView

The daily chart shows that the ContextLogic stock price has come under pressure in the past few months. Its volume has remained quite negligible with a three-month average volume being 691k shares. The stock is consolidating at the 50-day and 100-day Exponential Moving Averages (EMA) while the Average True Range (ATR) has dropped.

Therefore, the outlook for the WISH stock is bearish and I suspect that it will become a penny stock soon. However, with interest rates set to start falling in 2024, there is a likelihood that the stock, together with other meme stocks will bounce back, as I wrote here.

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