Risk/Reward Rating: Negative
Sea Limited (NYSE:SE) is a foreign holding company headquartered in the Cayman Islands with three principal business segments: Digital Entertainment (Garena), E-commerce (Shopee), and Digital Financial Services (SeaMoney). It should be noted that the company’s principal offices are located in Singapore and the Caymans headquarter location is primarily a legal and tax shell. All three business segments are in some of today’s popular, fastest revenue growth sectors.
Business Segments
The Garena Digital Entertainment segment is what many today would refer to as the metaverse. It features massive multiplayer games and virtual sports competitions. The company has produced a global hit game that has gone viral called Free Fire, which is largely responsible for the company’s recent success. The game has been downloaded over one billion times on Google Play alone. It should be noted that this business division is the only profitable one of the three business units. This profitability is due to the excellent economics of the business model (see the Roblox report for a comparison).
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