The slump in Sea Ltd.’s share price after India dumped one of its products led to Fund Manager Cathy Wood snapping up more than 145,000 shares of the gaming company.
ARK Investment Management LLC, the thematic investment company of Cathy Wood, bought the shares of Sea Ltd on Monday. Ark Next Generation Internet ETF purchased the bulk of the 145,000 shares after the firm updated its daily trades and compiled Bloomberg Data.
The share price of Sea Ltd closed 18% lower in New York on Monday after India banned its Free Fire game, the company’s marquee product. The selloff has resulted in the shares losing 65% of their value from the peak price in Oct 2019. The shares rebounded on Tuesday, rising by as much as 9.2% in New York trading.
Analysts have cited the gaming business’s slowdown with pressures on users’ growth, eCommerce business, and gaming revenues affecting the Sea Ltd shares. The decision of India to ban 54 apps, including Sea’s Free Fire, because of security concerns has added to the headwinds.
The banning has not only affected Sea’s outlook for gaming but eCommerce, too, according to the analyst Nathan Naidu of Bloomberg Intelligence. According to him, the ability of Sea Ltd to expand to new markets is also doubtful.
Ark Investment has been accumulating shares of Sea Ltd since the beginning of this year, and its volume and frequency of buying in this stock increased in February. ARK ETF bought share almost daily in February as per data compiled by Bloomberg.
Singapore-based Sea Ltd is founded by Chinese-born founders who are Singaporean Citizens. It has grown its eCommerce and gaming business globally with initial backing from Tencent holdings, the largest shareholders in Sea.
Ark’s daily trading updates show only active decisions by the management, not including any redemption activity from investors. Cathy wood portfolio strategy of ARK is at least five years holding as it is expected to include volatility of equity stocks.
ARK flagship advanced by nearly 150% in 2020. It struggled in 2021 as investors dumped the high-priced tech stocks and shifted to cyclical stocks, which were expected to benefit economic recovery.
