Shares of ContextLogic (WISH) - Get ContextLogic Inc. Report slumped after the parent of the Wish mobile e-commerce platform connecting shoppers and merchants reported a wider second-quarter net loss on 6.4% lower revenue.
The figures were weaker than Wall Street analysts had been estimating.
In the quarter the San Francisco company had a loss of $111 million, or 18 cents a share, compared with a loss of $11 million, or a dime a share, in the year-earlier quarter.
Shares outstanding rose by a factor of nearly six to 624 million. The company went public in mid-December.
Revenue dropped to $656 million from $701 million.
A survey of analysts by FactSet produced consensus estimates of a GAAP net loss of 13 cents a share on revenue of $722.9 million.
At last check ContextLogic shares were trading down 19% at $7.64. They closed regular Thursday trading down 4.3% at $9.41.
The company went public at $24 a share. The stock touched a 52-week high $32.85 at the end of January.
ContextLogic said that it has strengthened its logistics.
But as more people got vaccinated, economies reopened and the numbers of buyers installing and using the company's app declined more than ContextLogic expected, the company said in a letter to shareholders.
The comparison to a year earlier was particularly difficult since during the pandemic the company benefited because brick-and-mortar stores were closed. People stayed home and shopped online and via mobile.
In addition, the cost of digital advertising, which ContextLogic uses to reach consumers, has jumped.
To address these issues, the company said it would
-- Strengthen the quality and selection of products sold on the platform. “We also are adding more globally recognized brands and items that users know and search for, which we believe will drive more frequent purchases and higher average order values,” it said.
-- Develop a more engaging shopping experience. This effort] includes "features such as video reviews and live streaming shopping events with the goal of engaging users and increasing time spent on the Wish app."
-- Optimize the performance of the app. The company had been conducting a number of tests of the platform, slowing the app's performance for users. The company said it would better balance testing to ensure the app performed well.
At the same time, the company said it did not "expect these new initiatives to contribute meaningfully to positive year-over-year results before the second half of 2022."
On the executive front, ContextLogic recently named Tarun Jain to the new post of chief product officer.
Jain most recently was director of product management at Alphabet's (GOOGL) - Get Alphabet Inc. Class A Report Google since 2017. His resume also includes tenures at Flipkart (WMT) - Get Walmart Inc. Report and at Twitter (TWTR) - Get Twitter, Inc. Report and Microsoft. (MSFT) - Get Microsoft Corporation (MSFT) Report
And in July the company named Farhang Kassei chief technology officer. He'd been director of software engineering at Google.