The price of Singapore-based Sea Limited’s (SE) shares soared to hit their $359.84 all-time high on September 7, following news of Shopee’s expansion in Europe. But the price has since declined. So, is it wise to buy the dip even though the company faces competition from other e-commerce players, such as Amazon (AMZN) and MercadoLibre (NASDAQ:MELI)? Read on. Let’s find out. Headquartered in Singapore, consumer internet company Sea Limited (SE) is well known for Free Fire, a popular mobile battle royale game developed by its digital entertainment platform, Garena. Even though its digital financial services platform SeaMoney is still in its early stages of development, its e-commerce platform Shopee has expanded in several markets. Its shares soared to hit their $359.84 all-time high on September 7, 2021, following the announcement of Shopee’s possible launch in Poland. The stock has gained 18.1% over the past month to close yesterday’s trading session at $342.91. However, it is currently trading 4.7% below its all-time high.
On September 10, SE announced that it had raised approximately $6 billion in an equity and convertible bond sale, the proceeds from which it expects to use for strategic investments and potential acquisitions. However, move was not well received by all. Lightstream Research analyst Oshadhi Kumarasiri said, “The reason for this fundraising could be an early indication that the gaming business is no longer capable of funding the e-commerce and fintech growth.”
In addition, the company continues to face intense competition from e-commerce giants such as Amazon.com, Inc. (NASDAQ:AMZN) and other regional players, including MercadoLibre, Inc. (MELI) and Coupang, Inc. (CPNG). Furthermore, SE has witnessed a decline in hedge fund sentiment lately. So, the stock’s near-term prospects look bleak.