Forrest Li of Singapore’s Sea Ltd loses nearly US$18 billion in tech stock wipeout

A tech sell-off, the shutdown of his company’s main e-commerce operation in India and disappointing earnings have all added to Li’s woes

He’s still rich – worth an estimated US$4.7 billion – but no longer enough to make the cut-off for the top 500 richest people on the planet

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Forrest Li, chairman and group chief executive officer of Sea Ltd. is now worth an estimated US$4.7 billion. Photo: Bloomberg

Published: 7:34pm, 17 May 2022

Just a few months ago, Forrest Li had a US$22 billion fortune and was the richest person in Singapore. Now he’s emerging as one of the biggest losers from a market crash that’s wiped more than $1 trillion from the net worth of the world’s 500 richest people this year.

It’s been a litany of unfortunate events for the Sea Ltd. founder: the tech sell-off, the shutdown of its main e-commerce operation in India and disappointing earnings have tanked the company’s American depository receipts more than 80 per cent from a peak in October. He’s still rich – worth US$4.7 billion, according to the Bloomberg Billionaires Index – but no longer enough to make the cut-off for the top 500 on the planet.

Traders are preparing for more bad news. The company, which is expected to report first-quarter earnings later Tuesday, is expected to post a record loss of more than US$740 million, according to the average analyst estimate compiled by Bloomberg. Sea’s net loss had already widened in the final three months of last year as the firm sped up its expansion.

A person walks in front of a sign for Shopee, the e-commerce arm of Sea Ltd, at its office in Singapore. Photo: Reuters

The downfall showcases the vulnerability of the quick wealth creation from the early stages of the Covid-19 pandemic – when tech giants benefited from greater demand for their services such as Sea’s e-commerce and gaming. Higher interest rates and the tensions surrounding the war in Ukraine are further hurting growth stocks.

“Sea is going to see increasing challenges in 2022,” said Shawn Yang, managing director at Blue Lotus Capital, an independent equity research firm in Hong Kong that cut the stock’s target price to US$105 from US$180 on May 10.

The company’s e-commerce sales, its main source of revenue, could come short of its annual guidance of US$8.9 billion to US$9.1 billion as it faces intensifying competition from rivals and as consumers return to offline stores with the easing of Covid-19 restrictions, Yang said.