Wednesday’s Headlines: Sea Limited Shares Sink
1. Shares in Southeast Asian giant Sea Limited (SE) plummeted more than 11% on Tuesday off the back of some troubling news out of China. Tencent Holdings, which previously held an almost 22% equity stake in Sea, announced yesterday that it would be selling off more than $3 billion of its stock, reducing its stake to roughly 19%. The divestment itself is worrying enough, but the ambiguous statements from Tencent execs that it would retain a “substantial majority” of its equity in Sea “for the long term” and would not sell any more shares “for the next six months” left investors concerned about future developments. Should Tencent continue to drop out, it would leave Sea without a solid backer in a tough region. Read the full story here.
2. Tesla’s (TSLA) record-breaking numbers from Q4 2021 weren’t enough to keep the bears away in trading yesterday after its share price dropped more than 4%. The ire of investors originated from an official Tesla announcement yesterday that detailed plans to open a new Chinese service center in the Xinjiang region, which is home to a Muslim population known as the Uyghurs. The Uyghur population, according to the U.S., UK, Canada — as well as several human rights groups — are an oppressed people in China, and the region has drawn a lot of attention over the past year. Tesla will need to address the statement quickly lest it becomes yet another share price-damaging controversy. Read more here.
3. Monday’s new year gains are giving way to stories of decline after Pinterest (PINS) became the latest growth stock to hit a 52-week low on Tuesday. User estimates that show further declines have emerged from experts, causing analysts to downgrade their ratings on the social media stock, sparking widespread sell-offs. Referencing research from Pinterest’s Ad Manager and Apptopia, which tracks app downloads, analyst Michael Morris estimated that Pinterest’s aggregate users fell from 226.9 million in November to 218.1 million in December 2021. However, it’s important to note that this is different from the company’s own monthly active users (MAUs) metric used, which shows over 400 million users. Investors should wait and see what comes from Pinterest’s upcoming Q4 report. Read the complete report here.