Concerns over the valuations of high-growth but unprofitable companies in a rising interest rate environment have led to a sustained selloff. The warts of Sea Limited that investors have previously ignored due to the continued deliverance of high revenue growth are beginning to bite.
Full Answer
What's happening with sea limited's stock?
Sea Limited's stock has gone down 40% in recent weeks and is now trading at 11 times trailing-12-months (TTM) revenue while having grown revenue over 100%.
Should you buy sea limited and Amazon stock?
Today's video focuses on Sea Limited (NYSE:SE) and Amazon (NASDAQ:AMZN) and why these two e-commerce stocks should be on investors' radar due to substantial growth potential. Here are some highlights from the video. Select analysts and investment banks believe these fast-paced companies can catapult higher by 107% to 240% next year.
Should you worry about sea limited's decline in India?
It's also important to note that the news isn't as bad as the stock-price decline would suggest. India represented less than 3%, or $33 million, of Sea Limited's mobile-gaming revenue, and roughly 1.2% of the company's total revenue.
Does sea limited have a positive EBITDA?
Without the accounting treatment, Sea Limited has not reported a positive EBITDA as far back as 2014 when numbers are available. Not that shareholders cared, judging from SE stock's breathtaking climb since its initial public offering [IPO]. Market players were also unperturbed by Sea Limited's near consistent disappointment on earnings.
What happened
Shares of Sea Limited (NYSE: SE) crashed and burned on Monday, plunging as much as 19.2%. As of 10:40 a.m. ET, the stock was down 18.8%.
So what
Free Fire, Sea Limited's most popular video game title, was included in a list of apps that have been banned by India, according to a report by Bloomberg citing "people with knowledge of the matter." India's Ministry of Electronics and Information Technology has forbidden a total of 54 apps that it says originated in China, citing security concerns..
Now what
Sea Limited is something of a triple threat. While the company got its start from its Garena mobile gaming segment, its Shopee e-commerce segment is currently the company's biggest revenue generator, accounting for roughly 49% of sales in the third quarter.
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What happened
Shares of Sea Limited ( NYSE:SE) were trading down 5.9% at 11:41 a.m. EDT on Tuesday, following news that CEO Cathie Wood of ARK Invest had sold some shares on Monday.
So what
The stock has been on a tear over the last few years, as Sea's e-commerce and gaming businesses have expanded at a rapid pace. The company reported strong revenue growth of 65% in digital entertainment and 161% growth in e-commerce in the second quarter. The stock is up 58% year to date on top of more than a 2,000% gain over the last three years.
Now what
Sea is quickly emerging as a leading global player in e-commerce and mobile gaming. In the second quarter, its Shopee app was the most downloaded on mobile app stores globally, and Free Fire continued to rank as the top-grossing mobile title, according to App Annie.
What happened
Shares of Sea Limited (NYSE: SE) plunged 13.9% this week, according to data provided by S&P Global Market Intelligence. The Southeast Asian technology giant saw selling pressure after Tencent Holdings (OTC: TCEHY), Sea's second-largest shareholder, announced it was selling $3 billion of its stake in the business.
So what
On Tuesday of this week, Chinese internet giant Tencent announced it was selling more than $3 billion of its investment in Sea Limited. After the announcement, Sea Limited shares fell more than 10% for the day, accounting for the majority of the stock's losses this week.
Now what
With this recent sell-off, Sea Limited shares are now down almost 40% in the last three months, marking some of the worst performance in the stock's history as a public company. The stock now trades at a price-to-sales (P/S) ratio of 12, the lowest that multiple has been in over a year.
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Some investors are pessimistic about the company's global expansion plans
Nicholas has been a writer for the Motley Fool since 2015, covering companies primarily in the consumer goods and technology sectors. He is also the founder and president of Concinnus Financial, a Registered Investment Advisor based in Spokane, WA. He enjoys the outdoors up and down the West Coast with his wife and their Humane Society-rescued dog.
What happened
Shares of southeast Asia e-commerce and video game giant Sea Limited ( NYSE:SE) were down 8% today as of 1:30 p.m. ET. It deepens the sell-off the stock has suffered since October when Sea reached its all-time high. Shares have now been nearly halved in value since then.
So what
Sea has been using its highly profitable video game segment (publisher Garena, responsible for the international hit Free Fire) to invest in its e-commerce app Shopee.
Now what
Sea prioritizing sales growth instead of profitability, even though it's now a massive company with a market cap of $103 billion as of this writing, simply isn't going to sit well with many investors.
What happened
Sea Limited 's (NYSE: SE) stock price slide is accelerating today. On Tuesday, shares of the Singapore-based e-commerce, payments, and online gaming company slid more than 3% after the company reported better-than-expected sales for the third quarter but a huge earnings miss.
So what
What caused today's sell-off? It's not immediately obvious, because while one investment bank, Citigroup, did lower its price target on Sea stock, a second bank, UBS, raised its target. What's more, the new targets of $416 and $380, respectively, are both well above where Sea shares sit today.
Now what
As Bank of America explained in a note covered on StreetInsider.com, Sea Limited's new guidance released yesterday implies slowing fourth-quarter growth in the company's gaming division, partly offsetting the continued strength of the company's growing e-commerce business.
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Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community.
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What happened Shares of Sea Limited (NYSE: SE) were soaring 8.6% on Friday morning, a day after Reuters reported the Singapore government asked India if the tech company's online game Free Fire was unintentionally included in the country's crackdown on Chinese-owned technology.
