All at Sea: Tencent-backed gaming platform’s losses triple to US$263m in fourth quarter
Sea, operator of Southeast Asia’s biggest gaming platform, reported mounting losses amid investments for growth and said group president Nick Nash will leave his position at the end of the year.
The Singapore-based company reported net loss for the quarter ended in December more than tripled to US$263.1 million, compared with analyst estimates that it would lose US$201 million, while total revenue climbed 41 per cent to US$124.6 million, according to generally accepted accounting principles.
Nash, who helped lead Sea’s initial public offering last year, said he plans to start a new private-equity fund. He joined the company in 2014 from General Atlantic.
“I want to share the unique experiences I’ve had to help a new generation of companies here in Asia,” Nash, 39, said on a conference call. “That sharing of learnings from one generation of companies to the next has been a hallmark of what made Silicon Valley so successful. And I look forward to continuing that tradition here in Asia.”
Sea has struggled to gain steady footing since it raised about US$1 billion in the October IPO. Its shares have tumbled while short sellers are betting on further declines.
Analysts have remained bullish. Every one of the seven who cover the company recommend buying its shares, according to Bloomberg’s data, with an average target price almost 50 per cent higher than Tuesday’s close of US$12.26.
Analysts consider Sea to be Southeast Asia’s leading growth company, with backing from Chinese colossus Tencent Holdings that should help it to capitalise on the region’s adoption of games, e-commerce and digital payments. Sceptics see little evidence that Sea is developing anything resembling a business model with its mounting losses.
The company is investing in e-commerce and digital payments to bolster its games business. Its operating loss increased in the fourth quarter to US$191.1 million, compared with US$83.2 million a year earlier.
In 2018, Sea is forecasting total adjusted revenue of US$730 million to US$770 million, up from $553.6 million in 2017.