The price of Singapore-based Sea Limited’s (SE) shares soared to hit their $359.84 all-time high on September 7, following news of Shopee’s expansion in Europe. The price has fallen since then. So, is it wise to buy the dip even though the company faces competition from other e-commerce players, such as Amazon (AMZN) and MercadoLibre (NASDAQ:)? Keep reading. Let’s find out.
Sea Limited, an internet consumer company based in Singapore is best known for Free Fire. This popular mobile battle royale video game was developed by Garena, its digital entertainment platform. While its digital financial service platform SeaMoney still has its infancy, Shopee is expanding in multiple markets. Its shares soared to hit their $359.84 all-time high on September 7, 2021, following the announcement of Shopee’s possible launch in Poland. The stock has gained 18.1% over the past month to close yesterday’s trading session at $342.91. However, the stock is still trading 4.7% below its historical high.

SE disclosed that it raised $6 billion through an equity and convertible bond sales on September 10. The proceeds will be used for strategic investments as well as potential acquisitions. The move wasn’t well-received by everyone. Lightstream Research analyst Oshadhi Kumarasiri said, “The reason for this fundraising could be an early indication that the gaming business is no longer capable of funding the e-commerce and fintech growth.”

In addition, the company continues to face intense competition from e-commerce giants such as Amazon.com, Inc. (NASDAQ:) and other regional players, including MercadoLibre, Inc. (MELI) and Coupang, Inc. (CPNG). SE recently witnessed a decrease in hedge funds sentiment. So, the stock’s near-term prospects look bleak.

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