Unusual Options Activity In Sea Limited
Sea Limited engages in the digital entertainment, e-commerce, and digital financial service businesses in the Greater Southeast Asia. The company operates through three segments: Digital Entertainment, E-commerce and Digital Financial services. Its digital entertainment platform provides users to access mobile and PC online games, and eSports operations and live streaming of online game play and social features.
Several weeks ago, Sea Limited reported a fourth-quarter 2018 loss of $0.81 / share, but the stock jumped because the results were better than anticipated. I think the highlight of the earnings call was revenues surged 136.6% year over year to $389.3 million. In addition, quarterly active users in the digital entertainment segment more than doubled to 216.2 million, with average revenue per user of $1.10.
And after a successful launch of its self-developed game, Free Fire which was the fourth most downloaded game globally across the Apple App Store and the Google Play Store combined in 2018. More than 40 million players log on each day to find weapons and battle it out
The company also rolled out its first global eSports tournament for Free Fire in 2018 well.
All this traction has made Chinese-born founder Forrest Li, who is 41 years old and who owns 14% of Sea Limited, worth $1 billion on paper.
I only became aware of Sea Limited when I noticed usual options activity on Monday. And these bullish call options have a strike price that is $7 away from current price, but they expire in 36 days.
I can’t find any news as to what might be a catalyst, but since I have been following unusual options activity, something tells me they are going to be potentially acquired or some favorable regulation is going to go into effect. Should be an interesting next four weeks for Sea Limited.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
The Asian gaming market is so large and is expanding so rapidly that it's hard to go wrong with it.
Agree, it's a different culture in Asia when it comes to gaming.
It really is in a league of its own.
Still trading at same price range today - nothing untoward further out in time
Could be worth the price of a few dinners to take a punt. Could sell an April 17.5 put to pay for it.
Agree, a cheap speculative play that might be worth taking a shot. I'm going to follow the news/order flow on this co. the rest of the week and potential get in while I can.
Options pricing went normal when I looked in early trade this morning.
Appreciate the heads up...I will monitor things as well, if I see more activity, the probability of something happening will increase.
Interesting prospect given the struggle many publishers are having to combar Epic and its Fornite game and model. Had not heard of it either!
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They are backed by Tencent, which helps as well.