To The Moon

Sea missed earnings again and lost 22.07%. The three key business segments—gaming, e-commerce, and finance—had mixed results. Gaming remained profitable, e-commerce profits declined significantly, and the finance segment, while performing well, heavily relied on e-commerce.

Is $Sea Ltd(SE)$ still worth investing in? Are you a bagholder or not?

Below are some insights from Tiger @JinHan, @Omega88 and @FrankieRed. Which opinions do you agree with？

🎁Special Notes: Whoever showed up on the” What the Tigers Say” column will receive 100 Tiger Coins and an exclusive interview invitation to honor your contribution.

Click titles to read the full analysis:

1. @JinHan: Troubled Waters: Why Sea Limited May be a Sinking Ship for Investors

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Key Points:

• Sea Limited’s Chairman and CEO, Forrest Li, defended the company’s strategic decisions, emphasizing a focus on long-term profitability by prioritizing investments to increase market share and solidify its existing position. Despite these assurances, investors seem skeptical, interpreting the move as a defensive strategy against increased competition.

• My advice, shared on November 14, 2023, to avoid Sea Limited at all costs holds true, as the company needs to demonstrate a return to double-digit revenue growth to dispel the notion of a sinking ship. Without a significant change in its financial trajectory, Sea Limited risks burning cash and becoming an unattractive prospect for investors.

• With low e-commerce penetration in key markets, Sea Limited plans to strategically invest in growth. However, the market’s displeasure with the unexpected quarterly loss remains evident, and Sea’s stock may continue to face headwinds until investors gain confidence in the company’s strategy and execution.

2. @Omega88: Is Sea still worth investing?

Key Points:

• 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.

3. @FrankieRed: Is Sea still worth investing?

Key Points:

• It's impressive how much SE has fallen from grace. While I am still holding on position in SE at the moment I do believe that this stock has a modest upside at the current price. It's worth a consideration for a speculative position.

• None of its competition is new. SE is the dominant player in its markets, off course it won't grow as fast as someone just starting out and burning billions!

• SEA has challenges, certainly, will require patience no doubt, but as a long term perspective, i dont see how not to be long on SE. I will keep buying. Great long opportunity. I had been buying Sea Ltd since it dropping. I have faith and confidence in this company.

Questions for you:

Is Sea still worth investing in?

Are you a bagholder or not? What are your next moves?

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⏰Duration

• 22 Nov (24pm EDT)