San Francisco, CA - ContextLogic Inc (NASDAQ: WISH) has agreed to be acquired by Asia-based Qoo10 in a cash transaction valued at $173 million.
Key Highlights
- Transaction: Wish's operating assets were sold to Qoo10, an Asian e-commerce platform, for approximately $6.50 per share, representing a 44% premium.
- Monetization focus: ContextLogic seeks to monetize ~$2.7 billion in net operating losses (NOLs) as it becomes a public company with no debt and limited operating expenses.
- Future Plans: The Board will seek financial partners to maximize the value of the NOLs. If unsuccessful, the Company intends to return capital to shareholders.
- Impact on Customers and Dealers: Customers can expect more excellent product selection and competitive pricing in the combined marketplace. Merchants will benefit from integrated logistics capabilities and new cross-border opportunities.
What They Say:
Joe Yan, CEO of ContextLogic, commented:
"Integrating the Wish platform into Qoo10 will create a true global cross-border e-commerce platform...we expect the new one to have an enhanced customer experience."
Young Bae Ku, Founder and CEO of Qoo10, believes that;
the combined platform will "drive greater success for merchants while providing an even greater marketplace for consumers worldwide."
What Comes Next: NOL Preservation Plan
To protect its substantial NOLs, ContextLogic has adopted a tax benefit retention plan (the "Plan").
The Plan provides for issuing one preferred share purchase right for each outstanding Class A common stock share on or before February 22, 2024.
The Plan facilitates ContextLogic's future use of NOLs and will be subject to a stockholder vote at the 2024 Annual Meeting of Stockholders.
