Sea Limited Shares Plunge 45%, Logistics Reinvestment to Crush GMV Margins to 0.7%
Sea Limited shares have plunged roughly 45% over the past few months despite unchanged business fundamentals. Investor concern centers on TikTok Shop’s expanding competition in Southeast Asia and Shopee’s heavy logistics reinvestment, which is expected to compress gross merchandise value margins to around 0.7% this year rather than the previously assumed 1.2%.
1. Share Price Decline and Stable Fundamentals
Sea Limited shares have decreased by approximately 45% in recent months despite core e-commerce, digital financial services and gaming fundamentals remaining stable, highlighting a disconnect between market sentiment and the company’s underlying performance.
2. TikTok Shop Competition
Investors have cited TikTok Shop’s rapid expansion in Southeast Asia as a key competitive threat to Shopee, raising concerns about the platform’s ability to protect market share and sustain growth against a deep-pocketed rival.
3. Logistics Reinvestment and Margin Outlook
Shopee’s plan to reinvest heavily in logistics operations is forecast to reduce gross merchandise value margins to about 0.7% this year, down from prior street expectations of 1.2%, fueling fears of structural margin compression despite potential long-term moat strengthening.