Despite tripling its profits, Sea Ltd. stock is down 60% since September. What’s going on?

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Sea Ltd. is Singapore’s most profitable startup turned main tech firm.

Six months in the past, it was going head-to-head with DBS for the title of essentially the most priceless firm within the city-state, exceeding US$100 billion in market capitalisation.

That quantity has now shrunk to only over US$40 billion.

That is regardless of the numbers it retains reporting, that are, by virtually any goal measure, wonderful.

For the complete yr of 2025, Sea generated a web revenue of S$1.985 billion—which is greater than thrice what it earned in 2024—on the again of practically S$30 billion in income (a 30% enhance), as Shopee continues to dominate regional ecommerce with a reported 52% market share in Southeast Asia.

One may have understood the post-pandemic slide, when markets tumbled in late 2021, and cash retreated from unproven firms burning billions of {dollars} raised from buyers every year to gas their unprofitable enlargement. At one level, Sea had even misplaced practically 90% off its peak 2021 worth, and a few questioned whether or not it is ready to survive by itself.

Nevertheless, after hitting its backside valuation round 2023, it has made a profitable turnaround and remodeled right into a mature enterprise that not solely is in charge of its future however continues to develop at a powerful tempo, whereas increasing its provide with monetary companies via its Monee arm, which has elevated its lending by 80% over the previous yr.

Its survival isn’t below menace anymore, because it has amassed US$11 billion (S$14 billion) in money stash that it could deploy to make investments into its future.

If it’s so good, then why is it so dangerous?

It’s not the corporate that’s unpredictable, however the market

Sea’s decline in worth seems to be as a consequence of its continued therapy as a development inventory.

Regardless of market dominance, which noticed Shopee push its most important ecommerce rival Lazada to the sidelines, Sea isn’t handled as a family model, however quite an unique and unpredictable inventory, no matter its present efficiency.

Not the good information of at present, however the uncertainty about tomorrow is what’s making folks cautious.

The fast rise of TikTok Store throughout Asia—which has managed to seize double digit share in a number of nations (as much as 40% in Vietnam)—might have spooked buyers into considering that Sea’s finest days are over and that it could not be capable to compete with the social media behemoth who has entry to a captive viewers that Sea has to pay for.

This may increasingly have inspired stockholders to money in on their substantial features from the earlier two years (when Sea outperformed different investments like crypto or Nvidia) and wait to see the outcomes of the rivalry.

Shopee’s first few years in enterprise have been marked by competitors with an already established Lazada, which was acquired by Chinese language big Alibaba as a foothold in Southeast Asia. The Singaporean startup has finally defeated the incumbent to take its place.

Now that it has established itself because the market chief, it’s going through a problem from one other competitor. Similar to in 2023, when it needed to show it may stand by itself two toes, at present, it has to indicate it could do extra than simply defend its holdings and proceed to develop them at a powerful tempo.

The bar set by the markets retains getting increased. Forrest Li has managed to clear it each time. Can he do it once more?

The way forward for his firm, and his fortune, depends upon it.

Learn different articles we’ve written on Singaporean companies right here.

Featured Picture Credit score: Sea Ltd.