The Wish stock price rose by more than 5% on Tuesday as investors reacted to news that the company had acquired a new payment services license in Europe. ContextLogic’s stock rose to $12.45, which was 8.8% above the lowest level last week. It has a market capitalization of more than $7.2 billion.
Wish is a growing e-commerce firm
ContextLogic is the parent company of Wish, one of the fastest-growing e-commerce platforms in the world. The company is well-known for offering reasonably priced products ranging from electronics to clothes. Wish has more than 101 million monthly customers.
ContextLogic makes money in several methods. It generates a commission any time a person buys a product. This is known as the marketplace revenue.
It also makes money from ProductBoost, which is a product that gives sellers more visibility in the marketplace. This product made more than $50 million in revenue in the first quarter. Further, it makes money through its asset-light logistics business. This business made more than $245 million in the first quarter.
The Wish stock price has been one of the most active stocks in the United States as the company became a meme stock. A meme stock is a highly-shorted company that sees its stock pop due to retail traders in platforms like StockTwits and Reddit.
ContextLogic European license
The ContextLogic stock price is rising today after the company announced that it had acquired a payment license in Europe. The new development will help the company process transactions and increase control over the value chain in a compliant manner. The company’s regional manager said:
“Not only will it deliver cost savings as we eventually maintain control over our payments processes, but it will also provide a framework to explore opportunities in the payment services space.”
Still, the Wish share price remains under pressure since it is down by more than 20% from its highest level last week. This drop happened after the company’s CEO resigned. In a note, analysts at Evercore said that the resignation posed several execution risks for the firm. Other analysts have been relatively muted about the firm. In May, analysts at Stifel downgraded the stock to $12 while those ar Credit Suisse lowered their target to $24.
Wish stock price analysis
The four-hour chart shows that the Wish stock has been under pressure lately. This pressure started when it moved above the 23.6% Fibonacci retracement level. The stock is along the 50-day and 25-day exponential moving averages (EMA). The Relative Strength Index (RSI) has moved from the overbought level of 72 to the current 45.
Therefore, in my view, I suspect that the stock will likely bounce back as bulls attempt to test the next key resistance at $20. To do that, bulls will need to move above the important support at $15. On the flip side, a move below $10 will see it drop to $8.