Kessler Topaz is investigating claims on behalf of current shareholders of ContextLogic Inc. (NASDAQ: WISH) related to its recent announcement that it has entered into a definitive merger agreement in connection with the sale of substantially all of the company’s operating assets and liabilities to Qoo10 Inc. for $173 million in cash (the “Asset Sale”).
The cash consideration in the Asset Sale represents approximately $6.50 per share, but shareholders will not receive that consideration. Instead, the company will retain that cash while the board of directors (the “Board”) evaluates alternatives for the use of the cash. Specifically, the Board will consider using the cash in a post-close transaction designed to monetize certain tax assets (federal tax income net operating loss carryforwards, or “NOLs”) that will not be included in the Asset Sale.
In approving the Asset Sale, the Board rejected an alternative offer from Qoo10 Inc. to purchase all outstanding shares of the company for $6.50 per share, which would have been distributed directly to ContextLogic Inc.’s shareholders. The Board speculates that the company’s NOLs may be worth anywhere from $2.87 to $13.48 per share based on certain assumptions. However, there is no guarantee the company will be able to monetize the NOLs and return $6.50 per share or more to its shareholders.
Our investigation is focused on whether the Board breached its fiduciary duties to ContextLogic Inc.’s shareholders by their approval of the Asset Sale.
If you have any questions or would like to discuss this investigation, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com, or fill out the form below.