ContextLogic Inc. (WISH) announced that its Dutch subsidiary ContextLogic B.V. (CLBV) has been granted a Payment Services License from the Dutch Central Bank.
ContextLogic is an E-commerce platform that facilitates transactions between buyers and sellers. The stock is gaining a lot of attention amid the meme stock frenzy, with WISH gaining 53% in the past month compared to a six-month decline of 43.2%. (See ContextLogic stock charts on TipRanks)
The new Payment Services License will allow the company to process transactions directly and will help in managing the payments value chain in a compliant manner. This will also reduce the company’s reliance on third parties.
Along with the Netherlands, the service license will also be passported to other European markets where WISH operates, thereby increasing its scope of seamless payment processing throughout the E.U.
At first, the company will only use the license to pay its E.U. merchants directly and will explore other payment services later.
Ward Homminga, Regional General Manager of CLBV, stated that the license will allow the company to become a payment service provider in Europe and added, “Not only will it deliver cost savings as we eventually maintain control over our payments processes, but it will also provide a framework to explore opportunities in the payment services space.”
Evercore ISI analyst Shweta Khajuria recently downgraded the stock to a Hold following the news that the company’s CFO Rajat Bahri was resigning from his post effective July 23.
The analyst has a price target of $13 on the stock implying 17.7% upside potential to current levels.
Khajuria believes the resignation raises execution risk and said, “We are stepping to the sidelines post the news as we believe the departure of a tenured CFO this early post an IPO is a negative.”
The stock has an overall Moderate Buy consensus rating based on 2 Buys and 3 Holds. The average ContextLogic price target of $16.80 implies 52% upside potential to current levels.
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