Why Is Sea Limited (SE) Stock in the Spotlight Today?

Sea Limited (NYSE:SE) stock is in focus today after the company announced that it has shut down its e-commerce business in India due to market uncertainty.

SEA Limited - Shopee app on mobile phone
Source: Muh.Imron / Shutterstock.com

So what do you need to know?

Well, just months after its e-commerce arm Shopee launched in India, Sea said in a news release that it would be withdrawing from the market. This announcement will take effect on March 29.

Importantly, Sea Limited has faced a few other such dilemmas recently. Shopee has already pulled out of France, and India has banned its popular game Free Fire.

SE stock finished trading March 25 at $116.12 a share, down 48% year to date.

What Happened With SE Stock

Investors have likely been following SE stock since the Free Fire ban prompted a major selloff. Adding to the pain was an update from Sea Limited that growth in its e-commerce business would really slow. In fact, it said growth would fall to 76% in 2022, down from 157% in 2021.

Unfortunately, Sea Limited experienced even more pain this year. Back in January, Tencent (OTCMKTS:TCEHY) announced it would sell 14.5 million shares. For Tencent, this was a way to raise $3 billion. For SE stock, it was the cause of another selloff.

Why It Matters

Sea has faced a number of challenges that have caused investors to lose confidence in SE stock. Its Shopee entered into a crowded e-commerce market in India, and its Free Fire faced great pushback. Some reports suggest that the game was banned due to concerns the company would send data to China.

Although the company has pushed back and said that it does not transfer or store data of Indian users to China, its app ended up on a ban list.

The withdrawal from India and France come at a difficult time for Sea Limited as the company struggles with growth and a rapidly deflating share price.

What’s Next for Sea Limited

Things appear to be going from bad to worse for Sea and its stock. Its plans to expand internationally are running into serious problems that are likely to further curtail growth this year. Whether the company can right its ship and get is growth plans back on track is a question mark. But the lingering uncertainty is likely to further pish down SE stock in the near term.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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