Sea Group's share price has gone deep-sea diving, and people are worried about when, if and how much it's going up in the future. Since 2021, its market cap has dropped to $150B (yes, 75%!). Last Monday, after Sea's third-largest stock plunge, its CEO, Forrest Li, spoke up in a 900-word email sent to all Sea employees.

• Its share price previously soared 2,300% from its 2017 IPO until 2021.

‍

👉🏼  Main takeaways

• He gets you! The share price drop is painful, and he knows that many might be "frustrated, disheartened, or worried about Sea's future."
• It's all good: "Do not fear: we are in a strong position internally, and we are clear on our next steps. This is short-term pain that we have to endure to truly maximize our long-term potential."

Changing tides. Li's an under-the-radar guy who's hush-hush about plans, strategy and numbers. But with the sinking 📉 share price and several major setbacks over the past year, both shareholders and employees have been asking for one thing— transparency.

‍

🚢  Time to jump ship?

Here's a recap of what has led up to this.

Q3 2021 earnings report. While Sea's revenues rose 121.8% YoY to $2.7B, its net losses rose 34% to $571M, sparking a sell-off and a dip in share price.

Tencent cashes out $3B of Sea shares. In January 2022, Tencent reduced its stake in Sea from 21.3% to 18.7%. While you might think it's another Chinese company doing this because of regulation, we hear that Tencent just wanted to cash out on their investment.

Au Revoir, France. After less than four months in the country, Shopee announced it would shut down in France by March 2022. Sea previously mentioned it'd test the waters across different markets, and this was just a pilot.

With Free Fire out, is there a free fall? Along with several other China-linked apps, India suddenly banned Sea's Free Fall and Sea's stock dropped $16B overnight. This left investors worried that a ban on Shopee might be next.

• India's seen as a key market, so being unable to expand in the country was seen as a possible start to tons more trouble for Sea.
• Not just any game. Free Fire was India's highest-grossing mobile game in Q3 2021 and brings in a lot of $$$ for Sea.

‍

⚓️  Hold tight! Only time will tell if these treacherous waters are just a "short-term pain," so we're strapping in for the ride. And yes, we'll keep you updated!