ContextLogic investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described above, you may no later than July 16, 2021 move the Court to serve as lead plaintiff of the class, if you so choose.
ContextLogic is a San Francisco-based, global mobile ecommerce company that operates the Wish platform that connects its value-conscious user base to merchants. ContextLogic generates fees by offering advertising and logistics services to its merchants. With a large range of beauty, clothing and electronics products sold at wholesale prices, Wish claims to have managed to swiftly garner a user base of 100 million monthly active users (“MAUs”) and 500,000 merchants.
On August 28, 2020, ContextLogic filed a Form S-1 Registration Statement which, after several amendments, was declared effective on December 15, 2020. In the Registration Statement and Prospectus used to conduct the IPO (collectively, the “IPO Registration Statement”) and throughout the Class Period, the defendants made materially false and misleading statements about the strength of ContextLogic’s business operations and financial prospects by overstating its then-present MAUs and MAU growth trends.
The truth began to be revealed on March 8, 2021, when ContextLogic reported its fourth quarter and fiscal year 2020 financial results for the period ended December 31, 2020. Therein, ContextLogic disclosed that, by the time of its December 2020 IPO, its MAUs had already “declined 10% YoY during Q4 to 104 million, primarily in some emerging markets outside of Europe and North America where Wish temporarily de-emphasized advertising and customer acquisition as the company worked through logistics challenges it faced earlier in the year.” Following this news, the price of ContextLogic’s common stock declined on March 8, 2021, closing down more than 10% at $15.94 per share.
Then, on May 12, 2021, ContextLogic announced first quarter 2021 financial results for the interim period ended March 31, 2021. Therein, ContextLogic disclosed that its MAUs had declined another 7% to just 101 million. ContextLogic’s forward sales guidance also fell short, with its second quarter 2021 revenue guidance of just $715 million to $730 million, coming in significantly less than the $759 million the market had been led to expect and far less than the guidance of $735 to $750 million provided for the first quarter 2021. Following this news, the price of ContextLogic’s common stock declined $3.36 per share, or 29%, to close at $8.11 per share on May 13, 2021.
The complaint alleges that the defendants failed to disclose and misrepresented the following adverse facts that existed at the time of the IPO: (1) ContextLogic’s fourth quarter 2020 MAUs had declined materially and were not then growing; and (2) as a result of the foregoing, the defendants materially overstated ContextLogic’s business metrics and financial prospects.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll-free at (844) 887-9500; or via e-mail at email@example.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.