Market decline

Sea’s market decline hits $132 billion as stocks tumble again

(Bloomberg) – Sea Ltd., once the world’s hottest stock, has lost more than $130 billion in market value since peaking last year after a disappointing earnings report compounded its woes .

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The Singapore-based company issued a subdued outlook for its digital entertainment unit and its shares fell 13% in US trading. That shaved $11 billion off its market valuation, pushing its total decline to $132 billion from its October peak.

Investors pulled back as the mobile games company forecast between $2.9 billion and $3.1 billion in bookings in its digital games arm, expected to be its first-ever drop. That compares to last year’s bookings of $4.6 billion.

Learn more about Sea Ltd earnings. here.

The company had factored in a slowdown in online activity and unexpected government actions in India into its forecast, Yanjun Wang, chief executive of Sea Group, said in a conference call on Tuesday evening.

“We are giving back some of the gains we made partly during Covid and with additional discounts to reflect the situation in India, which is very unfortunate,” Wang said. “Given the uncertainty we face, it’s probably more art than science for us.”

Sea, which includes Tencent Holdings Ltd. as its biggest investor, faces increased regulatory scrutiny in India. Sea lost more than $16 billion of its value in its biggest daily decline after New Delhi abruptly banned its most popular mobile gaming title, underscoring the geopolitical challenges it faces in expanding its offering beyond of Southeast Asia.

While its digital entertainment booking outlook is not entirely unexpected due to slowing user growth and factoring in the negative impact of India’s fast-growing market, the magnitude of the decline has always come as a shock, Citigroup Inc. analysts wrote in a note.

Sea Ltd. sinks, game prospects worse than expected: Street Wrap

The company has sought to appease investors by focusing on e-commerce revenue growth, which it plans to pursue unabated as it focuses on key markets of Southeast Asia, Brazil and from Taiwan.

The Singapore-based company expects e-commerce sales, its main source of revenue, to reach $8.9 billion to $9.1 billion in 2022, from $5.1 billion in 2021.

Sea is trying to consolidate its early successes in Brazil, where it launched its online shopping business in 2019. Still, the company faces competition from Latin American e-commerce giant MercadoLibre. Sea announced on Tuesday that its online retail arm, Shopee, would pull out of France, a major market it entered a few months earlier.

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