Sea's Management Investors Smell More Trouble Post India Ban Triggered Selloff

Sea Ltd SE lost over $16 billion of value in its most significant daily market drop after India abruptly banned its most popular mobile gaming title, Bloomberg reports.

• New Delhi's decision to ban Free Fire, a lucrative title for the company, highlighted Sea's challenges from geopolitical tensions and mounting competition from rivals like Alibaba Group Holding Ltd's BABA Lazada.
• Sea's New York stock plunged over 18% overnight as analysts scrambled to parse India's reasoning and reassess Sea's growth prospects. Shares have lost almost two-thirds of their value since October. 
• Related Content: India Bans 54 Chinese Apps Including That From Sea, Alibaba, NetEase, Tencent
• India has banned hundreds of Chinese apps over the past two years, but the expansion of that policy to Sea caught its management and investors off guard who sense more trouble in the future.
• Investors worry that India could also ban Shopee, the second pillar of Sea's business.
• "Sea is a Singaporean company, and we aim to partner in India's digital economy mission," Sea stated. "We are committed to protecting the privacy and security of our users in India and globally, we comply with Indian laws and regulations, and we do not transfer to or store any data of our Indian users in China."
• Tencent Holdings Ltd TCEHY, Sea's long-time backer, is undergoing a national security review in the U.S.
• In January, Tencent disclosed plans to sell $3 billion of Sea stock to reduce its holding to 18.7% from more than 20% while eventually taking its voting interest down to less than a tenth.
• Price Action: SE shares traded higher by 3.74% at $134 in the premarket on the last check Tuesday.