If e-commerce is now just commerce, then ContextLogic (NASDAQ:WISH) stock is overvalued.

ContextLogic runs Wish.com. Wish is an online store that looks like China’s Pinduoduo (NASDAQ:PDD). It’s focused on creating impulse buys, on serendipity.

It’s the kind of store that, in a shopping mall, you could spend hours in or walk on past with no interest at all.

Wish became a popular stock because it’s a unique play in the space, but it’s not all that. The company reported a loss of $111 million during the June quarter on sales of $656 million.

It expects to bring in $2.8 billion in sales for the full year (Christmas should be better), and trades today with a market cap of around $4.1 billion, down nearly 70% from where it started the year.

Why is any retailer, let alone one that is losing money, worth almost 1.5 times sales?

Retailers and internet stocks are different beasts. An internet stock sells at a premium to sales, sometimes a huge one. It’s not uncommon to see an internet stock selling at 10 times its sales.

That’s because internet stocks deliver growth. Sales can double in a year, then double again.

Retailers must survive on margins as low as 3-5% of sales. Few have stocks selling for a premium over their sales. When they do, like Costco Wholesale (NASDAQ:COST), it’s because they are growing on both the top and bottom lines. But even Costco is selling for just 10% over its sales. ContextLogic is selling at 50% more than its sales.

A Closer Look at WISH Stock

I am not innocent here. I speculated as recently as August that WISH stock might be about to pop.

My hope was based on Jacqueline Rese, who began rebuilding the executive suite after being recruited from Square (NASDAQ:SQ) in May.

By August, WISH had won a license to run payments in Europe and hired an Alphabet (NASDAQ:GOOG) executive to manage the technology platform.

ContextLogic came out of a venture fund run by Palantir (NASDAQ:PLTR) co-founder Peter Thiel. Rese is on the board of Affirm (NASDAQ:AFRM), the Buy Now, Pay Later platform.

Those are a lot of names to drop in a single paragraph. But unless they do something, or at least say what they’re about to do, you’re buying hot air.

What’s Under the Churn?

Meanwhile, ContextLogic is also reconfiguring its ownership.

Director Hans Tung sold 220,899 shares on Sept. 9 at $7.05, for $1.55 million. That sounds bad, but private equity players have been pouring in. So has BlackRock (NYSE:BLK). Hedge funds now hold over 25% of the common.

Something is going on. It’s not just that WISH is cutting expenses and expanding its logistics network.

Our Thomas Niel sees logic in the bull case but he can’t pin down what that’s based upon. Nicholas Chahine thinks that patience and gumption should see bulls through. Ian Bezek thinks it’s worth sticking with.

The initial excitement over WISH stock was built on Reddit. Traders have been calling the stock “ready to fly”  as it falls. About 7% of 328 million trading shares were recently being held short but that’s barely worth squeezing.

The Bottom Line

From a technical stock picker’s perspective, WISH stock may look like a bargain because it has fallen. Some smart money has moved in. There’s smoke, there’s kindling, but where’s the fire?

Maybe Peter Thiel has something up his sleeve. Maybe Jacqueline Rese is a genius.

But I need more than names to value a company like ContextLogic as something more than a retailer. WISH has been trading as an internet stock, but if e-commerce is just commerce, then Wish is a retailer, and it should be valued as one.

On the date of publication, Dana Blankenhorn held no positions in companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.