Wish (NASDAQ:WISH) CEO Peter Szulczewski opened his shareholder letter last week in a way that was certain to scare off investors, who were already concerned about a company that had struggled since going public just eight months earlier.
“After a strong start to the second quarter of 2021, demand slowed due to a number of headwinds,” Szulczewski wrote in the first sentence of the letter published late Thursday, alongside Wish’s earnings report.
Wish shares plunged 20% on Friday and continued sliding on Monday, dropping another 9% to close at $6.87. The company, which operates a discount e-commerce app, debuted at $24 a share in December and traded as high on $31.19 on Feb. 1. The stock has since lost more than three-quarters of its value.
Wish reported a 6.4% drop in quarterly revenue from a year earlier to $656 million, while analysts expected a slight increase. Its net loss swelled by tenfold to $111 million, and monthly active users (MAUs) dropped 22% to 90 million.
The company attributed the disappointing sales figures to the reopening of the economy and a return to physical shopping. Similar announcements have come from e-commerce companies Amazon (NASDAQ:AMZN) and Wayfair (NYSE:W), which reported weaker-than-expected revenue, and Etsy (NASDAQ:ETSY), which missed estimates with its forecast.
However, Wish’s business has deteriorated much more dramatically. In the third paragraph of his letter, Szulczewski admitted that more users abandoned the app than expected.
WISH shares tallied seven cents, or nearly 1%, Tuesday to $6.94.