Why Sea Limited Stock Bounced Back Tuesday

Motley Fool2022-02-16

Key Points

  • Investors are pouring back into Sea Limited's stock today after a big sell-off yesterday.

What happened

Shares of Sea Limited(NYSE:SE), a digital entertainment and e-commerce company, were rebounding today after the company's stock fell off a cliff yesterday. Some investors may consider yesterday's massive sell-off a good buying opportunity today.

The tech stock jumped 15.8% as of closed.

So what

Some investors sold their Sea Limited positions yesterday after news reports said that India was banning a list of apps, including Sea Limited's most popular video game,Free Fire.

IMAGE SOURCE: GETTY IMAGES.

The news sent Sea Limited's stock tumbling more than 18% yesterday.

But investors appear to be warming back up to the company today. Sometimes when a stock crashes hard one day other investors subsequently rush in to snatch up shares that they believe are now trading at a discounted price.

In fact, Cathie Wood's Ark Investment Management bought 145,000 shares of Sea Limited yesterday as the stock was falling.

Now what

Sea Limited is a fast-growing tech company, with sales skyrocketing 121% in the most recent quarter. It's unclear how the app's ban will affect those sales or whether the company can fix officials' concerns in India to reinstate the app.

What long-term investors should be aware of is that Sea Limited's stock is pretty volatile right now. Over the past six months, the stock has plummeted 54%.

This doesn't mean Sea Limited won't be a good investment over the long term, but the past few days show that if you're going to own shares of the company you might want to prepare for a bumpy ride.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • JLKang
    2022-02-17
    JLKang
    Bumpy indeed 
  • GimaGO
    2022-02-17
    GimaGO
    Choppy seas
  • YBK
    2022-02-17
    YBK
    [Happy] [Happy] 
  • Hkh
    2022-02-17
    Hkh
    Great
  • Hkh
    2022-02-17
    Hkh
    Ok
  • romanc9
    2022-02-17
    romanc9
    Can buy only if its lower at 120
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