$WISH has been sold for to Asian Ecommerce Platform Qoo10 for $173 million

The parent company of the discount online retailer Wish has agreed to sell its assets and liabilities for $173 million to the Singaporean e-commerce company Qoo10.

ContextLogic Inc. will sell assets, including Wish, to Qoo10 for $6.50 per share in cash, as confirmed by a statement on Monday, which followed a Bloomberg News report.

Following the sale, ContextLogic will continue to exist as an entity holding the proceeds from the deal and $2.7 billion of net operating loss carryforwards, a tax-related asset that can reduce taxable income in the future.

To monetize its tax assets, ContextLogic may seek a financial sponsor, as mentioned in Monday's statement. One strategy could involve combining ContextLogic with a tax-inefficient business, although the board is considering various options.

Shares in ContextLogic surged as much as 44% in premarket trading in New York on Monday. The stock closed at $4.50 on Friday, giving the company a market value of about $108 million. However, its market value was $14 billion when it went public in 2020.

ContextLogic, operating as Wish, has faced financial challenges amid strong competition from e-commerce platforms like Shein.

The potential transaction follows a strategic review that ContextLogic announced in November, spurred by pressure from activist investor Cannell Capital, which had criticized its consistent losses and market value decline.

JPMorgan Chase & Co. is advising ContextLogic, while Jefferies Financial Group Inc. is working with Qoo10.