Video gaming and e-commerce mogul sees wealth losses surpass US$10 billion after Tencent sells Sea shares
- Sea founder Forrest Li has lost nearly US$11 billion since stock peaked in October, as losses accelerated after Tencent offloaded a sizeable stake
- E-commerce platform Shopee and mobile game Free Fire turned Sea into Southeast Asia’s most valuable company, but competition has raised profitability concerns
The man who once was Singapore’s richest person has had one of the world’s biggest wealth plunges.
Li became Singapore’s richest person last year as the company benefited from a surge in demand for gaming and online shopping amid the Covid-19 pandemic. But things soon started turning sour as Sea faced profitability concerns amid fierce competition and rivals’ public debuts.
Even before Tencent’s move, its ADRs had dropped 39 per cent from the high in October. They fell another 6.6 per cent on Wednesday to close at US$184.72 in New York.
Tencent said Tuesday it is cutting its Sea stake to 18.7 per cent from 21.3 per cent, with its voting rights decreasing to under 10 per cent. The move followed an earlier statement from Sea saying it is seeking to increase the voting power of its Class B shares and that Tencent would convert all such stock into Class A shares, resulting in Li becoming the beneficial owner of all outstanding Class B securities. The change, which is subject to a shareholders’ vote next month, would effectively increase Li’s voting power to about 57 per cent from 54 per cent.
Sea, based in Singapore and traded in the US, became Southeast Asia’s most valuable company thanks to the success of its e-commerce platform Shopee and mobile game Free Fire, which has surpassed 1 billion downloads on Google Play. Gang Ye and David Chen, who started the company with Li in 2009, have fortunes valued at about US$6 billion and US$2 billion, respectively.