What Happened: Shares of e-commerce and gaming company Sea (NYSE:SE) jumped 16.6% in the pre-market session after the company reported fourth-quarter results that narrowly topped analysts' revenue and adjusted EBITDA expectations. Notably, the company announced the first full year of annual profit since its IPO. The company noted that despite growing competition in the e-commerce market in South-East Asia, Shopee (SEA's e-commerce business) is gaining market share. As a result, the company expects Shopee's full-year GMV growth to be in the high teens range and its adjusted EBITDA to turn positive in the second half of this year.
Despite a challenging macro environment, SeaMoney (SEA's fintech operation) recorded the first year of positive profit in 2023. Finally, Sea's game studio, Garena, recorded huge success with Free Fire, one of its published games, emerging as the most downloaded mobile game globally, according to Sensor Tower.
Overall, this was a solid quarter for Sea, given the beat on adjusted EBITDA and profitability and the reassuring outlook. After the initial pop the shares cooled down to $52.16, up 2.2% from previous close.
Is now the time to buy Sea? Find out by reading the original article on StockStory.
What is the market telling us: Sea's shares are very volatile and over the last year have had moves greater than 5%. But moves this big are very rare even for Sea and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 5 months ago, when the company gained 14.1% on the news that the Jakarta Post reported that Indonesia's government plans to introduce regulations governing the use of social media for e-commerce. The move comes in response to concerns about predatory pricing by e-commerce sellers. The report noted that some officials specifically highlighted TikTok, which could be regarded as a competitor to Sea. Sea operates Shopee (an e-commerce platform ) in Southeast Asia, including Indonesia.
