What happened
Shares of Sea Limited (SE 0.05%), a digital entertainment and e-commerce company, were rebounding today after the company's stock fell off a cliff yesterday. Some investors may consider yesterday's massive sell-off a good buying opportunity today.
The tech stock was up by 8% as of 10:58 a.m. ET.
So what
Some investors sold their Sea Limited positions yesterday after news reports said that India was banning a list of apps, including Sea Limited's most popular video game, Free Fire.
Image source: Getty Images.
Reuters said India was concerned that user data was being sent back to servers in China. The company's app was just one of 54 apps that were banned. Sea Limited is based in Singapore, but Tencent Holdings, a tech giant in China, is a major investor in Sea.
The news sent Sea Limited's stock tumbling 17% yesterday.
But investors appear to be warming back up to the company today. Sometimes when a stock crashes hard one day other investors subsequently rush in to snatch up shares that they believe are now trading at a discounted price.
In fact, Cathie Wood's Ark Investment Management bought 145,000 shares of Sea Limited yesterday as the stock was falling.
Now what
Sea Limited is a fast-growing tech company, with sales skyrocketing 121% in the most recent quarter. It's unclear how the app's ban will affect those sales or whether the company can fix officials' concerns in India to reinstate the app.
What long-term investors should be aware of is that Sea Limited's stock is pretty volatile right now. Over the past six months, the stock has plummeted 54%.
This doesn't mean Sea Limited won't be a good investment over the long term, but the past few days show that if you're going to own shares of the company you might want to prepare for a bumpy ride.
