The fall extends the slide for the e-commerce company to close to 63% for the year to date.
There seems to be no end in sight to investors' aversion to growth stocks, as the Nasdaq Composite Index fell by 13.3% in April alone. Although there was no specific catalyst for the sell-off in Sea Limited's shares, one reason could be the continued high valuation for the stock, which trades at around 4.4 times sales even after the steep decline.
There are also lingering concerns over Sea Limited's e-commerce arm, Shopee, and its gaming division, Garena. Investors probably continued to be spooked by Shopee's abrupt exit from India, just six months after it made a foray into the populous nation. This pullout follows Shopee's exit from France earlier this year, in what may be perceived as the brand expanding too aggressively. It also didn't help that Garena reported a sharp quarter-over-quarter fall in quarterly paying users from 93.2 million to 77.2 million, even before its most-popular game, Free Fire, was banned in India as part of a crackdown on Chinese apps.
Despite these challenges, Sea Limited continues to focus on building its platform and extending its presence. Shopee has just obtained authorization from Brazil's central bank to operate as a payment institution there, enabling it to manage prepaid payment accounts. The e-commerce platform plans to tap on artificial intelligence to deliver more personalized content and deals by mining its growing user base to identify patterns in shopper behavior and individual interests.
The company has also scored another big win by being one of five winners of Malaysia's digital bank licences. Sea Limited partnered with YTL Digital Capital to clinch the coveted licence out of a total of 29 applicants that submitted their bids back in June 2020. The Malaysian central bank will conduct an audit on the operational readiness of the successful applicants before they commence business, in a process that could take one to two years.
This win comes more than a year after Sea Limited clinched one of four digital full bank licences in Singapore and takes the company a step further in boosting its digital currency division, SeaMoney, as well as extending its presence and cementing its track record as a major player in the financial scene.