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Sea Limited Shares Jumped More Than 6% in Morning Trading

Tiger Newspress2022-01-20

Sea Limited shares jumped more than 6% in morning trading.

Shares of Southeast Asian mobile gaming, e-commerce, and digital finance company Sea Limited have been more than cut in half in just two months. Sure, the company reported slowing sequential growth in its profitable digital entertainment segment last quarter, which is heavily influenced by the four-year-old gaming hit Free Fire. However, it was somewhat inevitable that mobile-gaming growth might soften, as the third quarter marked the first summer since vaccines were widely available.

Meanwhile, Sea's highest-growth businesses, including its Shopee e-commerce platform and SeaMoney digital finance ecosystem, showed strong growth. E-commerce revenue rocketed 134% last quarter, and SeaMoney surged more than 800%, albeit off a small base.

Yes, Chinese internet giant Tencent did just sell some of its Sea Limited stake, which could shake others' confidence in the company. But Tencent really just sold off a small portion of its holdings, decreasing its economic interest in Sea from 21.3% to 18.7%. That's just a 12% trimming of its position. In addition, Tencent is converting super-voting shares to regular shares, so its voting power will go under 10%.

The move might actually be due to the fact that Sea is rapidly expanding around the world, entering the huge markets of India and Europe last year. Likely, customers and authorities in those countries wouldn't want a company overly influenced by China to be too successful or retain too much consumer data. So the divestiture and reduction in Tencent's voting share could have been necessary for Sea to succeed in its next wave of growth.

After Sea's rapid correction, its stock trades for just eight times revenue. And while the company is burning through cash, it still has about $7 billion in net cash on its balance sheet, and it grew revenue by more than 120% last quarter. It's hard to say when these types of stocks will bottom, but Sea is still executing quite well, and its growth path is long.

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.

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Comment36

  • CCCH
    ·2022-01-21
    Not to worry, Sea will goes up to $300 plus
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  • Kaykay0930
    ·2022-01-21
    Great stuff! 
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  • koolgal
    ·2022-01-21
    Good news for SEA for a change as its share price jumped.  Still it is a great stock to hold as it has exponential growth ahead. Go SEA! Born in Singapore, Going Global! 🚀🚀🚀🌙🌙🌙
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  • HermioneG
    ·2022-01-21
    Awesome!
    Reply
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  • YueShan
    ·2022-01-21
    Good
    Reply
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  • Cvt
    ·2022-01-21
    Drop leh [Speechless] 
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  • time to eat
    ·2022-01-21
    Just buy
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  • gifftake
    ·2022-01-21
    I find these articles useless, especially as SEA dropped by 1.2% by the end of the trading day! 
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  • yyxyz
    ·2022-01-21
    Great
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  • Ericlam
    ·2022-01-21
    Considering to invest in
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  • aibee
    ·2022-01-21
    [Salute] 
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  • DesmondChin
    ·2022-01-21
    Still a no no for me, at less for now
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  • ty91
    ·2022-01-21
    Ok
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  • SilentWarrio
    ·2022-01-21
    Now negative....very volatile...
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  • Gladys8jk
    ·2022-01-21
    Ok
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  • UNknown
    ·2022-01-21
    Read
    Reply
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  • 74rk
    ·2022-01-21
    yes!
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  • SanWangtikup
    ·2022-01-21
    👏
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  • BKT
    ·2022-01-21
    Good. Pls like thanks.
    Reply
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