What Caught Our Attention in the Investment World? – Week of January 3-7, 2022

By Kuldip K. Ambastha

Sea Limited (SE), a technology company based in Singapore with operations in digital entertainment, e-commerce, and digital financial services, was in the news during the past trading week. The stock of Sea Limited had four negative daily returns plus one positive daily return for the trading week, with a -11.4% loss on Tuesday, January 4, 2022 being the biggest loss. Tencent Holdings Limited (TCEHY), a prominent China-based technology conglomerate, has decided to sell a 2.6% partial ownership stake in Sea Limited to raise approximately $3.1 billion. Tencent would like to use the sales proceeds as part of its philanthropic efforts plus other endeavors. After the sale, Tencent’s ownership stake will fall to 18.7% and the full stake will be in non-voting Class A shares, instead of the previously owned voting Class B shares.

Tencent’s power within Sea Limited will be more constrained going forward, while Sea Limited’s executive leadership will be potentially empowered to pursue new ideas of interest to them. Furthermore, with this move Tencent may be starting to reduce its Asian holdings in favor of potential overseas growth plus new technology categories. Tencent’s actions may also be happening now due to new, tighter anti-monopoly rules and regulations recently announced within China. Even within the context of a technology sector famous for its inherent volatility over time from underlying companies, Sea Limited and Tencent Holdings Limited provided significant volatility to the technology sector in the past trading week.

Keywords – Sea Limited, Sea Ltd., Sea Ltd, Sea, SE, Tencent Holdings Limited, Tencent Holdings Ltd., Tencent Holdings Ltd, Tencent Holdings, Tencent, TCEHY, technology, tech, conglomerate, digital entertainment, e-commerce, digital financial services, Asian, Asia, Singapore, China.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in SE or TCEHY.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2022 – Ambastha Financial LLC.




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