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A whirlwind, a hurricane, or an earthquake? Whatever it was, a Free Fire-ban-sized calamity sent Sea Group’s (SE, NYSE) share price on an almighty plunge, with the tech behemoth enduring its biggest one-day fall last week. Its shares are currently trading a little over 60% below its 52-week high of US$372.70.

The Singapore-based firm shed US$16 billion in market value - a roughly 18% drop - after India banned Free Fire, the best-selling game of Sea's digital entertainment unit Garena. The Indian government considers the title a threat to national security. While this led to a spate of downgrades or price target cuts by analysts, Sea did manage to pare some of the losses, ending the week down around 14%.

The ban on Free Fire has certainly shaken Sea’s investors, with fears growing over whether the ban could be extended to include another of its pillars in Shopee.

In our premium story analyzing Shopee’s odds in India, my colleague Samreen notes that the ecommerce platform has made a strong start in the country but faces strong competition from the likes of Amazon, Flipkart, Meesho, and Snapdeal.

Image credit: Timmy Loen

A bright spot ‌in the life of Forrest Li, Sea’s chairman and CEO, went largely unnoticed amid the chaos of his company’s share price. Shareholders approved changes last week that further entrenched Li’s control over Sea, giving him 57% of total voting power.

However, Sea has no time to relax - this premium story breaks down Garena’s slowing growth, Shopee’s revitalized competitors in its Southeast Asian markets, and the dangers of expanding at breakneck speeds.

Many questions remain up in the air. Will Sea sail through the Garena slowdown? How much will India’s ban on Free Fire impact Sea’s top and bottom lines? Perhaps investors will be treated to a few definite answers when Sea releases its Q4 2021 earnings report on March 1.

-- Shravanth

4 STOCKS TO WATCH

Image credit: Timmy Loen
 

🇸🇬 Grab (GRAB, NDAQ)

The super app has lost more than half its market value since it debuted in public markets in December. However, Temasek seems to have sensed a buying opportunity. Singapore's state-owned investment firm disclosed a stake in Grab via securities filings.
 

🇮🇳 Reliance Industries Limited (RELIANCE, NSE)

The conglomerate’s telecommunications arm, Reliance Jio, lost nearly 13 million wireless subscribers in December 2021. This follows another sharp drop three months prior, when the firm lost around 19 million subscribers. Jio was the worst hit of India’s telecom operators in a broader nationwide slump in total wireless subscribers due to recent tariff hikes. In other news, Jio was the sole investor in the funding round of this Singapore-headquartered unicorn.
 

🇺🇸 Amazon (AMZN, NDAQ)

The ecommerce titan brought an end to its long-standing tussle with Visa (V, NYSE) over payment fees that threatened to dent the financial giant’s business and disrupt ecommerce payments. Amazon will no longer charge an extra fee for customers who use Visa cards on its platform in Singapore and Australia.
 

🇨🇳 Tencent (0700, HKG)

Already dealing with China’s big tech crackdown, the gaming and social media giant is also struggling to find friends on the other side of the world. Ecommerce sites operated by Tencent were included on the US government's latest "notorious markets" list. While inclusion on the list is a blow to Tencent’s reputation, it carries no direct penalties.

3 MARKET WHISPERS

Photo credit: Timmy Loen
 

1️⃣ To err on the side of caution

Share markets are falling. Bond markets are falling. Geopolitical tensions and inflation are rising. There is nowhere to hide for investors and this sentiment has rippled through India’s IPO market. Prominent tech startups such as hospitality firm Oyo and logistics provider Delhivery have taken notice and are now hitting the brakes on their public debuts.
 

2️⃣ Pink slips

A prime target of China’s tech clampdown, DiDi Global (DIDI, NYSE) has lost more than 70% in market value since its listing last June - one of the biggest IPOs for a Chinese company listed on an American exchange. The ride-hailing firm is now going for a massive layoff across all departments. While 20% of overall staff will be let go, the headcount for each of DiDi’s operations and business departments will be reduced by 20% as well.
 

3️⃣ Reading between the lines

Recently listed tech firms in India are feeling the strain of the broader market route. Shares of Zomato (ZOMATO, NSE), Paytm (PAYTM, NSE), and Nykaa (NYKAA, NSE) hit all-time lows last week. In a nod to the current market conditions, PharmEasy may readjust the valuation it was aiming for through a public offering. The online pharmacy’s shares are currently being traded in the gray market at a significantly lower price compared to last year.

2 QUOTES FROM THE WISE

• HODLers look away - “It’s like some venereal disease or something. I just regard it as beneath contempt,” said Charlie Munger, a reputed investor and Berkshire Hathaway (BRK.A, NYSE) vice chairman, when discussing cryptocurrencies. This will not be entirely surprising for crypto enthusiasts, given that the 98-year-old Munger has been a long-time crypto critic.

Image credit: Pixabay

• "There are significant concerns regarding the design and magnitude of the equity award made to [Apple] CEO [Tim] Cook in FY21 ... Half of the award lacks performance criteria," proxy advisory firm ISS said in a letter. A fascinating proxy fight appears to be brewing at Apple (AAPL, NDAQ). The world’s most valuable company will hold its annual shareholder meeting in the first week of March.

1 NEWS YOU SHOULD KNOW

A yogi-run stock market 🧘🏼‍♂️

From Meta Platforms (FB, NDAQ) CEO Mark Zuckerberg’s “Metamates” moniker to Tesla (TSLA, NDAQ) CEO Elon Musk’s sizable charity donation, the internet has had a field day with quite a few stories this past week. But none have captured its imagination as much as a mysterious Hindu monk that ran India’s top bourse, the National Stock Exchange (NSE).

The guru was running the exchange, and Chitra Ramkrishna, the former CEO of the NSE, was “merely a puppet in his hands,” according to a probe by market regulator Securities and Exchange Board of India. Ramkrishna shared confidential information with the guru and sought his advice on crucial decisions, the investigation found. The development comes ahead of the bourse's much-awaited public listing.

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Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice.