How to Buy ContextLogic (WISH) Stock

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Contributor, Benzinga
Updated: July 12, 2021

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Just when you thought the meme stock madness would end with GameStop Inc. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC), the so-called degenerates on Reddit’s infamous community r/WallStreetBets have their eyes on yet another player — ContextLogic Inc. (NASDAQ: WISH). And while the heightened interest creates tailwinds for its momentum, company fundamentals are good, and there’s a compelling value proposition to consumers. 

Sure, the meme mania won’t last forever, but it will probably last longer than you think. Looking to enter the WISH territory today? Follow this beginner's guide to learn how to buy stocks, including WISH.

How to Buy WISH Stock

Follow these simple steps when you're ready to buy shares in WISH stock:

Step 1: Pick a brokerage.

You need to select a brokerage before rolling the dice on ContextLogic. Sure, you're not short of options and the stiff competition in the brokerage industry has seen the standardization of numerous incentives, including commission-free trading and ease of registration.

Start by defining your investing strategy, and then pick a brokerage whose tools align with your investing goals. For instance, if you're still a rookie you need to work with a brokerage that lets you practice with a paper trading account before putting real money on the line. If you want to complement your stock trading knowledge, an online broker with vast educational resources and research offerings may be a perfect fit.

Other factors you may want to consider when choosing an online broker include:

  • The fees charged, either as commissions on trades or account maintenance fees
  • The brokers’ trading platform —  is it a web-based platform, desktop platform, mobile app?
  • Access to other exchanges and securities
  • Customer support

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Step 2: Decide how many shares you want. 

Once your brokerage account is set, it's time to decide how many shares of WISH stock you'd like to purchase. Think about the amount of money you're looking to invest and weigh it against the stock's current market price. You'll pay near the market price if you invest today. Let’s say you want to invest $1,500, and WISH is currently trading at $12, you'll own 125 shares of the stock. There's always a risk that your investment may lose value overnight, so only invest an amount you can afford to lose.

If you need to make small incremental purchases along the way, consider a broker that allows fractional share ownership.

Step 3: Choose your order type. 

The order type you choose instructs your broker how and when to execute your trade. When trading stocks, it's important that you identify your primary goal — whether it's just having your buy order filled closest to the market price or controlling the amount you pay for a share. Then you can decide the order type that's most appropriate to achieve your goal. Here are some of the different order types you may use:

  • Market order: A market order is the most straightforward of all order types. It lets you buy a security at the next available price.  The result is a prompt purchase of all the shares of the stock, assuming the security is actively traded and the market conditions permit. 
  • Limit order: A limit order lets you specify the maximum price you will pay when buying a stock. A limit order only fills when the stock’s market price hits the limit price you specified. Otherwise, your order will never execute.
  • Stop order: A stop order combines multiple aspects. You set a stop price — the trigger price needed to activate your order. This trigger then creates a market order if the stock moves past your set price.
  • Stop-limit order: A stop-limit order will trigger a limit order when a stock trades at or through your specified stock price. Your stop price triggers the order and the limit price sets your purchase ceiling.

Besides using different order types, you can specify other conditions that will affect your order’s time in effect, price constraints or volume. Be sure to understand the various ways you can control your order — it’s your best bet at increasing the likelihood of getting the outcome you desire.

Step 4: Execute your trade. 

Now that you've chosen an order type, it's time to submit instructions to your broker. Your broker will execute the order per your instructions. Market conditions like price fluctuations and trading volumes may affect the amount of time it takes to fill an order. Your broker should notify you when your order is filled, and your shares should appear in your trading account.

WISH Stock History

Founded in 2010, e-commerce platform ContextLogic seeks to provide an affordable and entertaining mobile shopping experience to billions of consumers worldwide. Currently sitting among the largest and fastest-growing global e-commerce platforms, ContextLogic gives 100 million monthly active users in more than 100 countries access to more than 500,000 merchants offering approximately 150 million items. 

The company has experienced substantial growth since its founding in 2010. Revenue grew from $1.1 billion in 2017 to $2.5 billion in 2020 at a compound annual growth rate of 34%. Other key highlights include:

  • In November 2020, the company entered into a revolving credit facility that enables it to borrow up to $280 million.
  • As of Dec. 31, 2020, the company had cash, cash equivalents and marketable securities of $2.1 billion, most of which were held in cash deposits and money market funds.
  • In December 2020, ContextLogic raised $1.1 billion through the completion of its initial offering of Class A common stock of 46 million shares at a price of $24.
  • On June 14, 2021, the company inked a 2-year partnership with leading e-commerce platform PrestaShop. More than 300,000 merchants and brands on the PrestaShop platform will quickly and easily sell to millions of consumers on the ContextLogic marketplace.

Besides benefiting from strong revenue diversification, ContextLogic’s global logistics platform delivers efficiency on a massive scale. More than 90% of packages are shipped through its exclusive logistics platform, which translated to a 275% year-over-year increase in logistics revenue recorded in fiscal 2020. 

Screen-Shot-2021-07-12-at-2.43.07-PM

WISH Restrictions for Retail Investors

The main restrictions for WISH retail investors include the obvious lack of pre-initial public offering (IPO) access and the fact that WISH isn’t currently paying dividends.  

Pros to Buying WISH Stock

A casual review of WISH stock easily catches your attention. The company's current upward-pointing trend line isn’t the only thing working in its favor. Here are some other reasons why WISH deserves more attention:

  • Growing mobile commerce: By trying to democratize mobile commerce, WISH is tapping into a space with huge growth prospects. The global mobile commerce market was $2.1 trillion in 2019 and is expected to more than double to $4.5 trillion by 2024. 
  • Affordable pricing: Merchants on the platform mainly offer branded products that can be heavily discounted compared to branded alternatives across several other categories. WISH also implements policies that let it offer a broad selection of high-quality items at competitive prices.
  • Strong revenue diversification: WISH’s revenue streams are incredibly diversified.  Geographically, Europe accounts for 46% of sales, while 40% come from North America, 5% from South America and 9% from the rest of the world. By service, WISH has the following revenue proportions: 72% from its core marketplace, 20% from logistics and 8% from ProductBoost. 
  • Backed by Reddit: Shares of $WISH traded almost 20% from the beggining of June to the end of June. It started trading at $7.52 area to the high of $15.18 on 06-25-21. WISH gained high interest from people on Twitter, Discord, Facebook communities, and the most famous Wall Street Bets! With the graph setup at $15 range it had the range to run to $20. Soon we could potenially see shares trading again at those levels.

Cons to Buying WISH Stock

All stock purchases have inherent risks, and there are a few you should keep an eye out for when buying WISH stock.

  • Competitive market: ContextLogic faces stiff competition for both users and merchants. Its online competitors include large, global e-commerce platforms like Alibaba Group, Amazon Inc. (NASDAQ: AMZN) and Shopify (NYSE: SHOP) as well as more traditional discount retailers like Target Corp. (NYSE: TGT) and Walmart Inc. (NYSE: WMT). Its offline competitors also include killed discount retailers that offer heavily discounted products, such as TJ Maxx and Dollar General (NYSE: DG).
  • Complaints about merchants: Negative sentiments or publicity resulting from complaints about merchants selling on the ContextLogic platform may reduce its ability to attract users, discourage users from making additional purchases on the platform or otherwise damage its reputation. 
  • Seasonality: ContextLogic operating results are seasonal in nature because the platform’s transaction volume is affected by traditional retail selling periods that impact sales. This may cause fluctuation in the company's financial results.
  • High Voality: The crazy attention that was brought to WISH casued many poeple to now be bag holding at higher levels. The graph seemed to have a good setup however it is now trading between low $10 and mid $11. Many traders beileve it could have a potential pump and dumb, now the traders must rely on the chart indicators to go back to higher levels. With the shares trading at these levels, it can indicate a buy opportunity.

The Next e-Commerce Giant?

ContextLogic is revolutionizing e-commerce with a user experience that’s mobile-first, discovery-based, entertaining, and deeply personalized. Its highly personalized product feed enables its users to discover products they want to buy by simply scrolling through a mobile app and browsing. 

WISH started off 2021 on a high note with its 1st-quarter results exceeding expectations — a demonstration of the company’s intent to continue driving long-term growth through efficient user acquisition, higher retention and increased monetization. Thanks to positive investor sentiment, a strong business model and the recovering worldwide economy, all odds seem to favor this heavily undervalued stock.

Frequently Asked Questions

Q
Does ContextLogic have a direct stock purchase plan?
A

Currently, the company doesn’t have a direct stock-purchase plan.

Q
When did WISH stock go public?
A

WISH first issued shares of its Class A common stock on Dec. 16.