$SE: Earnings Momentum Builds — But $40M Settlement Still Shadows Progress

Court: Supreme

Case: 151344/2022

Sea Limited (NYSE: SE closed the day at $181.45, down 1.7%, underperforming the S&P 500’s gain of 0.26%. Despite short-term weakness, analysts expect a sharp turnaround with EPS projected at $1.11 (+105% YoY) and revenue at $5.84B (+36.8% YoY) in its next earnings release. Full-year consensus calls for $23.2B in revenue and $4.04 EPS, both pointing to sustained growth across gaming, e-commerce, and fintech. However, the company’s $40M settlement tied to investor claims over its Free Fire regulatory disclosures in India continues to weigh on credibility.

• Stock Dip: SE closed at $181.45, down 1.7% vs. S&P 500’s +0.26%.
• Earnings Outlook: EPS expected at $1.11, revenue $5.84B (+36.8% YoY).
• Full-Year View: Consensus sees $23.2B revenue and $4.04 EPS.
• Sector Lag: Shares fell 1.05% over last month vs. sector +7.4%.
• Settlement Overhang: $40M investor case tied to Free Fire risks in India unresolved.

Timeline Overview

• Sep 14, 2021: Sea raised funds via ADS and convertible notes offering.
• Feb 2022 – 2023: Investors alleged misstatements on user metrics and Indian regulatory risks.
• 2022: India banned Free Fire, exposing business vulnerability.
• Feb 28, 2025: Settlement terms filed in New York Supreme Court.
• Aug 4, 2025: Final claim deadline for investors.

Allegations Include

• Misstating intra-quarter gaming metrics.
• Downplaying risk of Free Fire ban in India.
• Omitting material regulatory uncertainties in offering documents.
• Misleading about stability of its digital entertainment business.

Investor Update

The $40M settlement resolves claims related to the 2021 offering but highlights investor concerns about transparency in Sea’s gaming division. While fundamentals point to strong earnings growth, regulatory and disclosure risks remain a drag on sentiment.

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