SEA is burning cash on shopee

2022-02-15

SEA is burning cash on shopee n seamoney faster than garena is able to earn. Until it shows sign of revenue/margin growth for these non profitable biz exceeding costs escalation more downside is not a surprise.

Is Sea Limited Stock a Buy After It Crashed and Burned on Monday?

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Comments

wubbix
2022-02-15
wubbix
I have never understood why the market value of SEA is so high. So I'm not surprised that the company's share price plummeted on Monday.
- Newbull:
  true expect more downside until we can see light at the end of tunnel for shopee n seamoney
zingle
2022-02-15
zingle
Before the inflection point appears, the stock price will keep falling.
blinkix
2022-02-15
blinkix
I incline towards your idea

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After cratering as much as 19.7%, the stock ended t","content":"<html><head></head><body><p>Shares of <a href=\"https://laohu8.com/S/SE\"><b>Sea Limited</b></a> had a tough day on Monday. After cratering as much as 19.7%, the stock ended the trading day down 18.4%.</p><p>Investors learned today that India had plans to ban the company&#39;s marquee mobile game <i>Free Fire</i>, citing security concerns. Given the situation and the tremendous haircut it was given today, is Sea Limited stock a buy?</p><p>Context is important</p><p>It&#39;s understandable that investors might have something of a new-jerk reaction to todays news. Over the past several years, the company has been introducing<i>Free Fire</i>to gamers in a number of new regions, including India and Latin America. Once the game has a foothold, Sea Limited introduces Shopee -- its e-commerce platform -- and Sea Money, its digital payments solution, employing something of a land-and-expand strategy.</p><p>A look at Sea Limited&#39;s recent results illustrates the success of that strategy. In the 2021 third quarter, revenue of $2.7 billion ballooned 122% year over year, while its gross profit of $1 billion surged 148%. Of that total, the digital entertainment (gaming) segment accounted for $1.1 billion, while e-commerce generated $1.3 billion accounting for the lion&#39;s share of Sea Limited&#39;s revenue.</p><p>However, India represented less than 3% of Sea&#39;s gaming revenue, or roughly $33 million, or roughly 1.2% of total sales.</p><p>But is it a buy?</p><p>While Sea Limited&#39;s revenue is growing like wildfire (or<i>Free Fire</i>, as the case may be), the company is far from profitable. It generated a net loss of $571 million in Q3, but the news isn&#39;t as bad as it might seem at first glance. Thetech giantgenerated operating cash flow of $513 million during the quarter, suggesting that non-cash expenses including depreciation account for the bulk of its losses.</p><p>This is a high-growth, high volatility stock that is by no means cheap. It has a valuation of 129, when a reasonable price-to-sales ratio is generally considered to be between 1 and 2. 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After cratering as much as 19.7%, the stock ended the trading day down 18.4%.Investors learned today that India had plans to ban the company's marquee ...</p>\n\n<a href=\"https://www.fool.com/investing/2022/02/14/is-sea-limited-stock-a-buy-after-it-crashed-and-bu/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.fool.com/investing/2022/02/14/is-sea-limited-stock-a-buy-after-it-crashed-and-bu/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1169371616","content_text":"Shares of Sea Limited had a tough day on Monday. After cratering as much as 19.7%, the stock ended the trading day down 18.4%.Investors learned today that India had plans to ban the company's marquee mobile game Free Fire, citing security concerns. Given the situation and the tremendous haircut it was given today, is Sea Limited stock a buy?Context is importantIt's understandable that investors might have something of a new-jerk reaction to todays news. Over the past several years, the company has been introducingFree Fireto gamers in a number of new regions, including India and Latin America. Once the game has a foothold, Sea Limited introduces Shopee -- its e-commerce platform -- and Sea Money, its digital payments solution, employing something of a land-and-expand strategy.A look at Sea Limited's recent results illustrates the success of that strategy. In the 2021 third quarter, revenue of $2.7 billion ballooned 122% year over year, while its gross profit of $1 billion surged 148%. Of that total, the digital entertainment (gaming) segment accounted for $1.1 billion, while e-commerce generated $1.3 billion accounting for the lion's share of Sea Limited's revenue.However, India represented less than 3% of Sea's gaming revenue, or roughly $33 million, or roughly 1.2% of total sales.But is it a buy?While Sea Limited's revenue is growing like wildfire (orFree Fire, as the case may be), the company is far from profitable. It generated a net loss of $571 million in Q3, but the news isn't as bad as it might seem at first glance. Thetech giantgenerated operating cash flow of $513 million during the quarter, suggesting that non-cash expenses including depreciation account for the bulk of its losses.This is a high-growth, high volatility stock that is by no means cheap. It has a valuation of 129, when a reasonable price-to-sales ratio is generally considered to be between 1 and 2. However, given Sea Limited's stunning growth rate and vast opportunity, investors with a stomach for volatility should consider getting shares at a discount.","news_type":1},"isVote":1,"tweetType":1,"viewCount":295,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":175,"xxTargetLangEnum":"ORIG"},"commentList":[{"id":100541986,"commentId":"100541986","gmtCreate":1644895648694,"gmtModify":1663243818645,"authorId":3479274806242608,"author":{"id":3479274806242608,"idStr":"3479274806242608","authorId":3479274806242608,"name":"wubbix","avatar":"https://static.tigerbbs.com/d0164ea7c27dfdf8c987c88fa9aebdea","vip":8,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9095631382,"objectIdStr":"9095631382","type":1,"supId":0,"supIdStr":"0","prevId":0,"prevIdStr":"0","content":"I have never understood why the market value of SEA is so high. So I'm not surprised that the company's share price plummeted on Monday.","text":"I have never understood why the market value of SEA is so high. So I'm not surprised that the company's share price plummeted on Monday.","html":"I have never understood why the market value of SEA is so high. So I'm not surprised that the company's share price plummeted on Monday.","likeSize":1,"commentSize":1,"subComments":[{"id":100556629,"commentId":"100556629","gmtCreate":1645014825631,"gmtModify":1663243888935,"authorId":4101367049328400,"author":{"id":4101367049328400,"idStr":"4101367049328400","authorId":4101367049328400,"name":"Newbull","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9095631382,"objectIdStr":"9095631382","type":1,"supId":100541986,"supIdStr":"100541986","prevId":0,"prevIdStr":"0","content":"true expect more downside until we can see light at the end of tunnel for shopee n seamoney","text":"true expect more downside until we can see light at the end of tunnel for shopee n seamoney","html":"true expect more downside until we can see light at the end of tunnel for shopee n seamoney"}],"verified":10,"allocateAmount":0,"commentType":"valid","coins":0,"score":0},{"id":100541983,"commentId":"100541983","gmtCreate":1644895592300,"gmtModify":1663243817745,"authorId":3479274779734729,"author":{"id":3479274779734729,"idStr":"3479274779734729","authorId":3479274779734729,"name":"zingle","avatar":"https://static.tigerbbs.com/124ddb27832ad3a5d8aa835fe6bb7572","vip":8,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9095631382,"objectIdStr":"9095631382","type":1,"supId":0,"supIdStr":"0","prevId":0,"prevIdStr":"0","content":"Before the inflection point appears, the stock price will keep falling.","text":"Before the inflection point appears, the stock price will keep falling.","html":"Before the inflection point appears, the stock price will keep falling.","likeSize":1,"commentSize":0,"subComments":[],"verified":10,"allocateAmount":0,"commentType":"valid","coins":0,"score":0},{"id":100541977,"commentId":"100541977","gmtCreate":1644895537655,"gmtModify":1663243820032,"authorId":3479274804085724,"author":{"id":3479274804085724,"idStr":"3479274804085724","authorId":3479274804085724,"name":"blinkix","avatar":"https://static.tigerbbs.com/a70f12c6c7ca3e0f00f4b8fb561c5998","vip":8,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9095631382,"objectIdStr":"9095631382","type":1,"supId":0,"supIdStr":"0","prevId":0,"prevIdStr":"0","content":"I incline towards your idea","text":"I incline towards your idea","html":"I incline towards your idea","likeSize":1,"commentSize":0,"subComments":[],"verified":10,"allocateAmount":0,"commentType":"valid","coins":0,"score":0}],"isCommentEnd":false,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/9095631382"}