Sea Group faces choppier waters

THROUGHOUT MOST of the pandemic Sea Group, a Singaporean super-app, had wind in its sails. Both its e-commerce business, Shopee, and its gaming unit, Garena, were thriving thanks to growing appetite for all things digital. In October Sea’s stockmarket value surpassed $200bn, making it the first South-East Asian stock in history to break into the exclusive ranks of the world’s mega-cap companies.Since then the weather has turned, wiping more than $130bn from Sea’s market capitalisation. The global tech sell-off is only part of the story. Investors also harbour fears that are specific to the company. In January Tencent, a Chinese internet giant, trimmed its stake in Sea from 21.3% to 18.7%. Tencent had earlier reduced its holding from nearly 40% at the time of Sea’s listing in 2017 and gave no explanation for the latest divestment. Whatever the reason, the market didn’t like it, perhaps fearing that Tencent’s retreat implies doubts over Sea’s prospects.