Sea CEO’s distress call creates technology waves

A man stands in front of Southeast Asian e-commerce and gaming group Sea Ltd’s sign at its office in Singapore on March 5, 2021. REUTERS/Edgar Su

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HONG KONG, Sept 21 (Reuters Breakingviews) – Candor is often welcomed in times of crisis. Singaporean Sea CEO Forrest Lee isn’t mincing his words when he sounds the alarm on a $26 billion e-commerce for video game outfit. In an internal memo seen by Breakingviews on September 15, Bahr candidly admitted that it will not be able to raise external funds and plans to achieve “self-sustainability”, or positive cash flow, within 12 to 18 months. Companies from Meta ( Meta.O ) to Alibaba ( 9988.HK ) are emphasizing financial discipline amid a global economic slowdown.

But the message of the sea is eye-catching. In March, Lee defended the company’s strategy for growth instead of focusing on profitability to keep shareholders, Bloomberg reported. The change in tone comes amid reports of major job cuts, a retreat from Latin America and a 150% jump in second-quarter operating losses to $837 million, from a year earlier. Since the beginning of the year, the stock of the Sea New York has dropped to 75 percent.

Cash-burning peers in the region like Grab take note. Losses are widening at the $11 billion super-up, which continues to invest in fintech. A sea distress signal is a wake-up call. (Robin Mack)

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Editing by Thomas Shum

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