- 1 ContextLogic Inc. has suffered a huge deficit last year.
- 2 Retail companies are trying different strategies to avoid a financial hit.
Recession fear is taking over the people’s minds and it is eventually shaking companies in the retail sector. ContextLogic Inc. (NASDAQ: WISH) stock has been plummeting for a week now. Though the price struggled a bit to recover from the fall, it failed to beat the gravity. Currently, the company shares were trading at the market price of $0.3977 at the publication time.
ContextLogic Looking to Expand User Base
The company recently revealed that they have suffered a deficit of $2.9 Billion throughout 2022. It added that their position may remain the same, a possible aftermath of rising inflation. Moreover, they continue to assess the covid-19 impact on their business. The retail giant is currently prying over strategies to expand their consumer base.
ContextLogic says they have lost 68% monthly active users and 66% buyers from the network during 2021 and 2022. The impact on the user base is an aftereffect of the pandemic driven years. Now the company is trying to convert their forthcoming users into buyers to go uphill.
Previous earnings reports were a thumbs up for the retail company with the highest surprise in earnings per share coming in at 40.99% during Q2 ‘22. However, the company revenue has suffered throughout the year with Q2 ‘22 and Q3 ‘23 acting as a surprise blow with negative 30% during both the quarters.
WISH Stock Price Action
WISH stock has lost over 80% value in a year. The chart shows a couple of downtrends which began in March 2022. The price was slashed in half within the next couple of months. A consolidation phase is visible during May and July 2022, however, containment went loose to kick off another down trend.
The price rejected the regression trend during November and December 2022 and commenced the new year with a sweet uptrend. Again, the price met with the inflationary pulls and has struggled to keep up against headwinds. WISH Stock has landed to its lowest hanging support at $0.3743.
Williams Alligator shows an opening mouth signaling a downtrend. Chop zone is rejecting any possibility of a consolidation while average true range (ATR) highlights declining volatility in days to come. If the shares gain a positive momentum, WISH stock will be targeting the resistance at $0.5199 next.
Current state of the retail market is no more than a recession for the sector. Target (NYSE: TGT) is busy bulking their shelves with food and household essentials while Macy’s (NYSE: M) and Walmart (NYSE: WMT) are trying to up their sales meter through their loyal consumer base. Best Buy (NYSE: BBY) is trying to work their way up by adding exclusive products to attract new customers.
Moreover, the Organization of Economic Co-operation and Development (OECD) has urged central banks to keep raising their interest rates, according to Financial Times. The outlook comes after a nosedive in food and energy prices as well as China’s loosening over covid-19 restrictions.
The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
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