Omega88
2022-09-18

$Sea Ltd(SE)$

Chief executive Forrest Li said in an internal memo sent to staff on Thursday that the leadership team has decided that it will not take any cash compensation "until the company reaches self-sufficiency".

"With investors fleeing for 'safe haven' investments, we do not anticipate being able to raise funds in the market," Mr Li said, reiterating that the company's primary objective for the next 12 to 18 months is to achieve positive cash flow as soon as possible. Li has finally realized that the previous approach of burning excessive cash is not working! But better be late than never!

The good news is Sea has sufficent cash to sustain itself in short to medium term as it has raised about US$6.3 billion of cash when the share price was at its peak! Based on its cash burn rate of US$1.4 billion last year and more conservative spending in the upcoming quarters, the cash should keep the business running for a while.

The once formidable Unicorn stock from SG has seen its share price dropped significantly since Dec 21 and its share price has dropped ~74% YTD!! Notably, Temasek Holdings have added ~ 0.2mil shares to take its total stake in SE to 2.75mil shares, which is worth ~US$170 mil.

With more impending interest hikes, it would be good if Sea focus more on their gaming business which is the cash cow instead of expanding their loss-making business (e-commerce and fintech). Go slow and steady.

Although I'm not vested in the stock in the short-term, I'll be monitoring its progress closely to see how the company is planning to reduce costs and improve its profitability! As the gaming industry is expected to grow from current US$200 billion to US$400 billion by 2027 and Garena will be a gem in the Esports industry. Do you agree with me? Let me know your thoughts!

@TigerStars@CaptainTiger@MillionaireTiger     

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Comments

  • YorkTurner
    2022-09-18
    YorkTurner
    SE will have to raise capital in order to keep the growth going on. It is a way to have more debt in order to keep the growth. The question is SE can sustain the growth rate or not because the East Asia countries all in tail spin.
  • HuatKueh
    2022-09-19
    HuatKueh
    Bad shape and doubt will ever go back to glorious days with amazing stock prices;/
  • jeffry09
    2022-09-18
    jeffry09
    I don't think that SE has another 10% in gains in it. Looks pretty bad here.
  • Hosay_hosay
    2022-09-19
    Hosay_hosay
    [Miser][Miser][Miser]
  • Trying hard
    2022-09-19
    Trying hard
    Thank you!
  • Calvin20
    2022-09-19
    Calvin20
    Thanks
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