ContextLogic is a mobile ecommerce company that operates the Wish platform, which connects customers with merchants across the globe.
On December 16, 2020, ContextLogic completed its IPO, issuing 46 million shares of its Class A common stock at $24 per share, raising more than $1.1 billion in gross proceeds. According to the complaint, the Registration Statement and Prospectus used to effectuate ContextLogic’s IPO were materially false and misleading. Specifically, these offering materials misrepresented the then-existing truth about: (1) the “differentiated user experience” ContextLogic repeatedly credited as driving the wide-adoption of the Wish platform by customers who are offered access to high-quality merchants, selling affordable, high-quality products, and merchants who are offered reliable logistical services; (2) the Company’s sales and marketing engine, which ContextLogic said it would “continue to invest in” and that purportedly serves as a competitive advantage in attracting new users and increasing user engagement on the Wish platform; and (3) the Company’s monthly active user (MAU) growth, which it considered “a key indicator of user engagement and awareness of [its] brand.”
On March 8, 2021, ContextLogic reported its fourth quarter and fiscal year 2020 financial results for the period ended December 31, 2020, disclosing that its MAUs had already “declined 10% year over year during Q4.” In that same report the company also revealed logistics challenges it faced earlier in the year. On this news, ContextLogic’s stock declined 10%, falling from $17.77 on March 5, 2021 to close at $15.94 per share on March 8, 2021, the next trading day.
Then on May 12, 2020, ContextLogic announced 1Q21 financial results for the interim period ended March 31, 2021, revealing that its MAUs had declined another 7%. On this news, ContextLogic’s stock price fell $3.36 per share, or 29%, to close at $8.11 per share on May 13, 2021.
What You Can Do
If you purchased ContextLogic securities between December 16, 2020 and May 12, 2021, or if you have questions about this notice or your legal rights, you are encouraged to contact attorney Jonathan Zimmerman. The lead plaintiff deadline is July 26, 2021.
Scott+Scott has significant experience in prosecuting major securities, antitrust, and consumer rights actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Amsterdam, Connecticut, California, Virginia, and Ohio.