Previously 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".
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.
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). 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.
However, investors must be wary that Sea relied on unsustainable consumer subsidies to gain market share rapidly. On that matter of sustainability, investors' hugely negative reaction in Q2 largely resulted from the company's return to potentially unsustainable spending it embarked on in the years when money was cheap. In a high-interest rate environment, with a determined and capable competitor like TikTok, Shopee is looking increasingly more like the disrupted in time to come. With SE still valued at a premium, it could be dead money at best
$Coinbase Global, Inc.(COIN)$
Do you agree with me? Let me know your thoughts!
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Can't wait to see what Sea's earnings report has in store! Hoping for some solid numbers that'll send their stock soaring.
I've much less confidence in the company's ability to recover SE's malaise from here
With interest hikes looming, Sea should really focus on their gaming biz, you know? Cash cow
SE still looks pricey, could be a dead money trap, honestly.
High-interest rates now, TikTok's on the rise – Shopee might get disrupted!