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Capital Calls

18 August 2021 By Breakingviews columnists


– Sea results

Low tide. Sea is swelling. The Southeast Asian technology giant said second-quarter revenue rose by a blistering 159% year-on-year to $2.3 billion. Boss Forrest Li raised 2021 guidance for its shopping and digital entertainment units, while gamers showed little sign of tiring of the self-developed smash hit “Free Fire”, which remained the highest-grossing mobile title in multiple markets, including India.

Yet the $162 billion company is spending heavily to grow, although management says it is doing so efficiently. Even as the adjusted EBITDA loss per order at its e-commerce division fell by a respectable 20% year-on-year, Sea’s overall sales and marketing expenses more than doubled. Total adjusted EBITDA at the group swung to a loss during the period.

For now, investors are looking past the cost of expanding into Latin America and its push into food delivery: Sea shares closed up 6% in New York. As competition increases more scrutiny will fall on its rich valuation. (By Sharon Lam)


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