Free Fire banned in India! Shutout adds to Sea's woes, logs $16 billion loss
Sea Ltd. lost more than $16 billion of value in its biggest daily market drop after India abruptly banned its most popular mobile gaming title, Free Fire. Investors are growing concerned the ban may just be the start of the company’s troubles. Singapore-based Sea went public in 2017 and quickly became the most valuable company in Southeast Asia, based on its potential to expand its offering of gaming, e-commerce and financial services beyond its home turf. India's decision to ban Free Fire -- a lucrative title for the company -- highlighted Sea’s challenges from geopolitical tensions as well as mounting competition from rivals like Alibaba Group Holding Ltd.’s Lazada.
India has banned hundreds of Chinese apps over the past two years, but the expansion of that policy to Sea took management and investors by surprise. The startup was founded by Forrest Li, who was born in China but is now a Singaporean citizen. Its biggest shareholder is Tencent Holdings Ltd., the Chinese social media giant.
“India is seen as one of the next major growth drivers for Sea’s e-commerce and gaming arm outside Southeast Asia,” said Angus Mackintosh, founder of CrossASEAN Research, which publishes reports on Smartkarma. “With the Free Fire ban, there’s a risk that the authorities would also turn on the Shopee app, and Sea could lose that upside for growth.”
Investors worry that India could potentially also ban Shopee, the second pillar of Sea’s business, where it had about 300 employees and 20,000 local sellers as of December. On Monday, Li reassured shareholders at its annual general meeting that the company had a grip on the situation. He didn’t comment on the Free Fire ban in India.
The markets didn’t buy it. Sea’s New York stock plunged more than
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