Sea announces first share buyback of up to US$1 billion

Photo credit: Sea Group

Consumer internet company Sea on Monday announced its first share repurchase programme, under which it may buy back up to US$1 billion of its American depositary shares.

The move comes a week after the company reported a 144.6 percent rise in its third-quarter earnings to US$375 million, from US$153.3 million in the year-ago period.

Sea said in a statement that the share buyback programme demonstrates its “confidence in its long-term prospects,” and will allow it to opportunistically repurchase its shares.

The timing and amount of share repurchases under the authorisation will be determined based on market conditions and other considerations. The share buyback may include open market purchases, privately negotiated transactions, block trades, derivative transactions, trading plans or any combination of such methods, added the New York Stock Exchange (NYSE)-listed company.

Sea, which is headquartered in Singapore, owns digital entertainment company Garena, ecommerce platform Shopee and the digital financial services firm Monee.

Its founder, Forrest Li, had told the company’s employees in October that the tech conglomerate could hit a US$1 trillion market capitalisation at some point, thanks to artificial intelligence.

Morningstar analyst Chelsey Tam said last Wednesday that Sea’s stock remained undervalued, with the “market yet to fully reflect its long-term growth potential.”

Citi analyst Alicia Yap noted that the programme demonstrates the confidence that Sea’s management has in the company’s long-term growth.

“We believe Sea’s management has been agile in assessing the operating environment and investing strategically to strengthen its competitive moat in each market,” she added. “We believe Sea is better-positioned than its peers to step up investment and maintain its leadership gap.”

Shares of Sea on NYSE closed 0.6 per cent up at US$140.85 on Friday.

See also: Sea Group’s financial health in 7 charts

This story was republished with permission from The Business Times. It was moderately edited to reflect Tech in Asia’s editorial guidelines.