Shares in Singapore-based tech firm Sea Ltd (NYSE:SE) plummeted, losing nearly a third of its value, after quarterly results saw revenue fall short of expectations.
At US$3.1 billion, the owner of the Shopee e-commerce platform reported its revenue some US$100 million short of Wall Street consensus pitched at US$3.2 billion.
It said that Shopee, which contributes approximately two-thirds of the company's top-line, grew by nearly 21% to US$2.1 billion – missing analyst forecasts for US$2.25 billion.
Sea’s financial services segment saw sales rise by over 50%.
Digital entertainment segment, which includes the Garena (a distributor for the League of Legends, Heroes of Newerth, and, an e-Sports operator), meanwhile, extended a losing streak with its fifth negative quarter, dropping more than 41%.
Whilst Sea stock was down US$16.70, or 29.3%, at US$40.26 per share, group chief executive Forrest Li emphasised the company’s ongoing ‘strategic shift’.
"We have started, and will continue, to ramp up our investments in growing the e-commerce business across our markets.
“Such investments will have an impact on our bottom-line and may result in losses for Shopee and our group as a whole in certain periods."
Previously, Sea cut its workforce by around 10% and cut marketing budgets, which helped deliver its first quarterly net profit in the December quarter.
For the June quarter, Sea managed US$331 million of net income and US$510 million of earnings (adjusted EBITDA), versus losses of US$931.2 million and US$506.3 million, respectively, in the same period last year.