It gets far less attention than Tesla, the FAANGs or even the Robinhood flavour of the week. Yet Sea Ltd. has quietly become the world’s best-performing large-cap stock, stoking a debate on Wall Street over whether the Singapore-based gaming, e-commerce and payments company is the next great internet colossus or just Exhibit A in a global tech bubble that’s destined to burst. For now at least, bulls have the upper hand. Swelling optimism that loss-making Sea may one day become both the Tencent and Alibaba of Southeast Asia has boosted its New York-listed shares by more than 880 per cent in the past 18 months, the largest gain worldwide among companies with a starting market value of at least US$1 billion. Short sellers who placed record wagers against the stock in June are retreating at an unprecedented pace. Chip maker SMIC’s founder says ‘optimistic’ China can catch up with US in semiconductors If Sea chief executive officer Forrest Li is paying attention to any of this, he’s not letting on. The 42-year-old billionaire said in a video interview that he’s been working seven-day weeks in the office since April, leading his company through what may be its most pivotal year. Demand for Sea’s mobile games and online-shopping platform has surged during the pandemic, and the company is bidding on a Singapore digital-banking license to accelerate its push into financial services. Li is also looking for potential acquisitions in gaming, logistics and e-commerce. Gold blasts past US2,000 level on rush into gold-backed ETFs as hedge against uncertainties “We don’t like to think too much about our success or how we got here,” he said when asked about Sea’s stock price. “It doesn’t matter if the environment is good or bad. It doesn’t change a company or a person.” Even by the standards of today’s tech boom, Li’s ascent has been remarkable. Born in the Chinese port city of Tianjin, he worked for the local units of Motorola Solutions and Corning before enrolling in Stanford’s MBA programme. He founded Sea, then known as Garena, in 2009 and took it public with backing from Tencent in 2017. After a rocky first year of trading, Sea’s stock has gone on to trounce everything in its class. Initially, the gains were fuelled by the runaway success of Sea’s first self-made mobile game – a battle royale called Free Fire that has attracted as many as 80 million daily active users in more than 130 markets. But Sea’s e-commerce and financial services units are now increasingly important pillars of the bull case. Its Shopee platform overtook Alibaba’s Lazada in the fourth quarter of 2019 to become the top e-commerce provider in Southeast Asia, according to research firm iPrice, and the business accounted for more than 40 per cent of Sea’s revenue in 2019, up from 2.3 per cent in 2017. SeaMoney, which offers everything from e-wallets to micro loans, could ultimately be just as large, according to Li. “We think this is a huge business opportunity,” he said. The soft-spoken founder has some big-name believers. Tencent still owns about 20 per cent of Sea, and the stock was the biggest holding as of May in Noah Blackstein’s Dynamic Power Global Growth Class fund, one of the world’s top-performing equity mutual funds of the past decade. Other prominent shareholders include Chase Coleman’s Tiger Global Management LLC and Kora Management LP, an emerging markets-focused hedge fund in New York, according to regulatory filings as of March. Kora began investing in Sea in early 2018 after meeting with Li, Daniel Jacobs, the hedge fund’s founding partner, said in an interview. “We’ve seen over the last two years a company that’s got a great team and great products going after a big market and just executing incredibly well,” he said. “We think this is a mini Tencent and has the ability to be a really successful, large company in a global context.” Sea has already claimed the title of biggest company in Southeast Asia after its market value swelled to US65 billion, topping DBS Group Holdings Ltd. and PT Bank Central Asia for the first time earlier this year. Revenue has also grown quickly, jumping 163 per cent to US$2.2 billion in 2019, though it’s still just a fraction of DBS’s US$11 billion. As for Sea’s US$1.46 billion net loss last year? Jacobs isn’t bothered by it. “They are thoughtful and prudent about building a business,” he said. “We are very much of the view that the company has all this under control.”