SAN FRANCISCO - ContextLogic Inc. (NASDAQ: WISH), known for its Wish e-commerce platform, has entered into an agreement to sell most of its operating assets and liabilities, including the Wish platform, to the Asian e-commerce company Qoo10 for approximately $173M in cash. The transaction, which is expected to close in the second quarter of 2024, was approved by ContextLogic's Board of Directors and represents a 44% premium over the company's closing stock price on February 9, 2024.
Following the sale, ContextLogic will continue as a publicly listed entity with reduced operating expenses and a debt-free balance sheet. The company plans to leverage approximately $2.7B in Net Operating Loss (NOL) carryforwards and certain retained assets to benefit shareholders. The Board is considering opportunities for a financial sponsor to help monetize the value of these tax assets.
Tanzeen Syed, Chairman of the Board, emphasized that the sale of operating assets while preserving NOLs is the best way to maximize shareholder value. ContextLogic CEO Joe Yan expressed optimism that integrating Wish into Qoo10 will enhance the customer experience and expand product offerings.
Qoo10's CEO, Young Bae Ku, anticipates that the acquisition will lead to greater success for merchants and an improved global marketplace for consumers. The combined platform aims to capitalize on cross-border e-commerce opportunities.
To protect the ability to use its NOLs, ContextLogic has adopted a tax benefits preservation plan. This plan issues one preferred share purchase right for each outstanding share of the company's Class A common stock to stockholders of record as of February 22, 2024. These rights will be exercisable under specific conditions outlined in the plan.
The company will host a conference call and webcast to discuss the transaction, allowing analysts and shareholders to participate in a Q&A session.
This news article is based on a press release statement from ContextLogic Inc.
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