Wish stock is a great way to invest in a fast-growing company. Founded in 2010 by Piotr Szulczewski and Danny Zhang, Wish is an American online e-commerce company. The company offers millions of products and boasts a stellar customer service record. It has received over $2 billion in funding from investors.
Wish’s low debt-to-equity ratio (0.5) may pose a problem when it comes to securing favorable rates on its debt. Moreover, the stock is trading at less than a multiple of sales, which puts it at risk of becoming a takeover target. Amazon is reportedly considering a $10 billion acquisition of Wish before it goes public. Another threat to Wish’s survival is that its MAUs will continue to decline, which will force the company to ramp up its marketing efforts, accelerating Wish’s widening losses.
The stock has dropped over 97% since its peak in late January 2021. The company owns the Wish platform and recently announced a partnership with eDesk, which provides merchants with a unified customer support platform and tools. Its forward Price/Sales and Price/Book ratios are below industry averages.
Despite the company’s strong earnings and growth potential, Wish’s business model faced a number of weaknesses. First, it took a long time to receive and process returns. Second, its quality control system was lacking. This allowed unscrupulous merchants to sell low-quality or counterfeit products. Finally, Wish faced competition from other cross-border platforms, such as Alibaba’s AliExpress and Pinduoduo’s Temu. These marketplaces have better logistics networks and stricter quality control than Wish.
