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My Thoughts on Sea Limited's Proposed Offering -- Is This Creating a Buying Opportunity?

By Jose Najarro – Sep 10, 2021 at 8:00AM

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After Sea Limited announced plans to build up cash for future expansions, its stock price dropped over 5%.

Today's video focuses on Sea Limited's (SE -3.85%) announcement of a proposed offering of ADSs and Convertible Notes, which was reported on Sept. 9. Initial reaction has brought a negative sentiment toward Sea Limited's stock price. Here are some highlights from the video. 

  1. Sea Limited has been a trendy stock in the past few weeks as online reports have shown that Shopee, Sea Limited's e-commerce platform, is expanding into new regions. Investors have expressed concern about the amount of cash needed to grow into so many areas at once. 
  2. Sea Limited ended its most recent quarter with over $5.6 billion in cash and short-term investments. The proposed offering is expected to raise over $6 billion in cash, growing its total cash position to over $11 billion. 
  3. In the press release, Sea Limited stated that the proceeds would go toward business expansion and other general corporate purposes, including potential strategic investments and acquisitions. Investors are now on waiting mode to see if Sea Limited will announce any acquisitions in the upcoming weeks. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the pre-market prices of Sept. 9, 2021. The video was published on Sept. 9, 2021.

Jose Najarro owns shares of Sea Limited. The Motley Fool owns shares of and recommends Sea Limited. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Stocks Mentioned

Sea Stock Quote
$59.02 (-3.85%) $-2.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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