Sea Ltd. posted a bigger loss than expected and withdrew its 2022 e-commerce forecast, joining other online giants struggling to gauge an increasingly uncertain global economic outlook.
Its shares dived 14% in New York, wiping $800 million off the wealth of founder Forrest Li. Once Southeast Asia’s most-valuable company, Sea's shares have now fallen almost 80% since peaking in October.
Its been a steep downfall for one of Singapore’s most prominent tycoons, whose fortune has tanked almost $17 billion from its highs. Li’s net worth of $5.1 billion now makes him the fourth-wealthiest in the city-state, according to the Bloomberg Billionaires Index.
Sea Tumbles as Macro Uncertainties Cloud Outlook: Street Wrap
The downbeat result came after Sea cut its full-year e-commerce revenue outlook in May, to a low of $8.5 billion versus $8.9 billion previously. Shoppers emerging from pandemic lockdowns are cutting back on online purchases, shifting toward essentials during a potential recession.
The suspension of e-commerce revenue guidance “will no doubt send unease to investors sentiment,” said Alicia Yap, analyst at Citigroup Inc.
Sea, which counts Tencent Holdings Ltd. as its biggest investor, has suffered a run of setbacks this year, including a sudden ban of its most popular mobile game in India and the subsequent closure of its e-commerce operations there.
The company has been trying to boost profitability as topline growth plateaus. Second-quarter sales rose 29% to $2.9 billion, the slowest growth in almost five years.
Definitely a good idea to buy and hold.
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