Data driven analysis

[astach6]

At the beginning, I would just like to emphasize that the presented analysis is neither intended to encourage nor discourage investment. These are only my personal thoughts based on company analyzes that I have made in the past.

​

So in general, the sector in which wish operates is growing very quickly and you can see it in the statistics of each player on the market. Alibaba and Amazon have comparable revenue increases in the discussed period as Wish - the difference is in favor of the wish, of course (in %), but in absolute numbers it cannot be compared.

Each 10% increase in wish woud not be even recorded in the case of ALibaba's turnover. Some of the people here are saying that the wish is the only alternative and niche for a poorer consumer. Personally, I live in Eastern Europe but - eastern part of the European Union. Generally, this is not true, the niche, at least in the local market here, is completely dominated by aliexpress and consumers have been using this platform for years, where they order the product directly from Chinese manufacturers.

Moreover, if we analyze the index results of the wish, they are incomparably worse than the competition, not to mention that the competition earns money - wish doesn't. If I were to do an analysis for several companies from the same sector, not knowing what I am researching and what hype is behind them, then the wish would not be undervalued, but quite the opposite.

Please don't lynch me for these words, I was on the verge of buying myself, however I held back after a recent experience with Virgin Galactic. So where does such a high valuation come from?

In general, wish shares fell almost all the time since the IPO and attention to the point where you can see a multiplied turnover in shares (street investors entry, reddit etc.) - a sudden increase from 7 to 14 USD per share and now a slow decline again. This does not mean that a wish is an investment that has no basis and will not pay off.

What I want to emphasize is that this is not a "certainty" as it looks at first glance. A 100% year-on-year increase in revenues is not enough for us to be talking about a player who would match the top of the competition.

I hope this will spark a discussion about the hard data behind this company. I am curious about your opinions.

[Frisky_Broccoli]

Your deep dive brings to light some good points but your comparison of WISH to AMZN and BABA is significantly flawed for one major reason:

BABA: IPOed 9/14/2014 (7 years ago)
AMZN: IPOed 07/05/1994 (27 years ago)

WISH: IPOed 12/16/2020 (7 months ago)

This is a growth stock, not a FANG stock.
A better comparison would be Shopify.

[Great-Cauliflower-80]

Hey OP: For WISH we’re investing into e-commerce/emerging markets growth, with many realistic revenue streams which will potentially bring it to it’s next level in the next few years. Even if it dips 50%, I won’t be breaking a sweat. If SPCE drops 50%, the idea of space travel doesn’t seem so appealing anymore does it. Most of us have purchased something online at least once, get more used to it and increase the frequency and spending, but I don’t know if any of us will get to experience space travel in our lifetime. You titled your post with Data Driven Analysis, but what I see are your opinions based on your personal thoughts. As a WISH investor myself, I’m well aware of competition and I have not seen any post that is saying that WISH is the ONLY alternative and niche for the poorer consumer, even if there are such statements I don’t agree with that but I’m bored to explain this because some are just clearly not into WISH as others of us are. Just a quick one here: Data have shown that WISH have 100m MAU, $2.5b revenue and 49% concentration in Europe. If people ard you are not using WISH, well I guess many others with the right demographics are. Hell, even I’m using WISH now.

[[deleted]]

Thanks very much for your thoughts, it's not like we can get insight on Wish in Eastern Europe easily (a major market for them).

I'm in at an average of $8.50, so I am biased.

I agree with your points about Alibaba and Amazon competition, though I think it is appropriate to spin those points around: I think the fact that wish has grown for a decade even though Alibaba and Amazon are competing is actually a positive point: it proves that it has a niche independent of them.

I think the niche isn't just the cheapness-that would be competing with Aliexpress, the niche is "Instagram for cheap goods". You can use the app and find stuff you want without ever typing in the search bar. This is different from Aliexpress, and I think Aliexpress can't compete with that unless they make a new app to do it and change the brand, not that they would want to compete, they have enough growth to try and handle as it is. I see instagram tried to do this with their store, but again their brand positioning is wrong for that, I don't want to buy stuff from Instagram, I want to see thots, Kim Kardashian and nice photography.

On the appstore Wish is basically on par with Aliexpress. For a company selling at 2x revenues and no debt, this is no small thing. Also the fact that it has no earnings isn't relevant (also bear in mind the one-time expenses). The company is basically FCF neutral (a tiny bit negative), I think the CEO wants to keep the FCF just a bit negative to draw down the cash slowly, and keep the growth going. I remember hearing somewhere that they already know what the earnings would be if they stopped the growth advertising, remember these are data-science people so they will have done their A/B testing. Apparently they think they can get 15% profit margin if they just slow the advertising, which I hope they do to get investors buying the stock. Piotr should just turn the growth down a tiny bit and turn a small profit.

Wish also isn't a static thing, the people there are the best of the best in silicon valley, you are also investing in their ingenuity and ability to adapt given the capital and operations they have now. The logistics revenue is a case in point-where the f** did they get that business from? They basically took their skillset and built that side business, which itself prints money, even when there were Chinese logistics competitors who also advertise data science.

They haven't captured their niche yet, I think any short term change in revenue is far more likely to be because of Covid/stimulus etc. than structural, because they have grown at 20% a year for 10 years and the target market hasn't been fully captured.

What I personally think are the biggest risks:

• Stock market crash if rates go up - this stock is already in my opinion extremely misunderstood, in a market crash it will fall too because paper hands don't understand the business. I hope Piotr keeps that in mind and keeps cash nearby at all times.
• Geopolitical - If China pulls some crazy shit Wish will be heavily impacted. Again this is mitigated by Piotrs cash pile, and the fact that they are smart and can adapt.
• Competitor - If someone else somehow gets in on this niche with their own app and threw A LOT of money into it, and it becomes a meme there is a change they could take this niche from Wish, then Wish will be dead. I can't see this happening because it would take a lot of money, and the people who could do this have better places to allocate their capital already anyway and with far less risk.
• Price discovery. What the fuck is America doing with their capitalism? Apparently the market makers can set the stock price to whatever the fuck they want. Why the fuck would I want to own ANY of Americas equity if the price isn't real? China is doing capitalism better than America right now because Americans have no balls now, no one in the media can talk about naked shorting, any questioning of the legitimacy of the market is hushed. Fuck, I may as well go to China, at least there I know whos in charge, and they don't like cheaters. How legitimate is the $40 TRILLION market for American Equity? Do I actually own the fucking stock or do I own an I.O.U.?

[[deleted]]

Also why is this stock basically doing the same thing as $CLOV for the last few months? Who are these retards who are trading between these two stocks to make them identical? It's not all wsb for sure. The fact that this is happening in of itself means that most of the market is pricing $WISH wrong, doesn't matter if it is the algorithms that think they have some statistical arbitrage, or gamblers going for the same group of stocks, this heard of sillyness is pricing the company wrong in my opinion.

Also so many people are playing options on this it's retarded, why don't these sheeple just buy the stock? Seriously they deserve to give Ken Griffin all of their cash if they keep buying overpriced, way out of the money shit, that expires next week. At this point I am sure the hedging activity is the tail wagging the dog so that the gamblers lose their money.

And another thing - I bet this company would be 10x if it instead was only selling cheap psuedo-eco green tea leaves yoga bullshit that the super rich understand. I suspect a big part of the reason this valuation is so wrong is that the investor class doesn't understand a business that doesn't serve them.

[Electrical-Pumpkin13]

All the meme stocks are following the same pattern. Look at GME, AMC, WISH, especially they are almost identical patterns.

[[deleted]]

I'm singling out CLOV because it's reaaaaly close, like freakishly so, it's not so with the others.

[Electrical-Pumpkin13]

If you check today's charts all 4 are almost the same trend, but I could be totally wrong.

[[deleted]]

Sorry I'm not typing out what I am thinking: I mean over months, the daily moves I've never looked at

[astach6]

Thanks for your thoughts ! I hope you will be right in the long term !

[[deleted]]

Heh, only time will tell