Shares of Sea Ltd. (SE) - Get Report sank Tuesday after the giant Singapore-based digital entertainment and e-commerce company found itself foundering amid widening losses by its online shopping unit.
The company's stock price plunged 8.45% to $33.05 after Sea Ltd. reported that its e-commerce division, Shopee, lost $248.3 million in the second quarter, vs. a year-earlier loss of $188.3 million.
The rising red ink came even as Sea Ltd. reported a big increase in revenue generated by its e-commerce unit, which brought in $177.4 million compared with $58.8 million during the second quarter of 2018.
Sales and marketing costs rose during the quarter, jumping 18.6% to $138 million, the company said.
The decline in Sea Ltd.'s stock price came even as the company reported a big jump in revenue and earnings generated by its marquee digital entertainment unit, the developer of "Free Fire," it's Fortnite-like video game.
Sea Ltd.'s digital entertainment division reported a 218.6% jump in adjusted revenue, which rose to $443.2 million in the second quarter. Adjusted earnings hit $263.8 million, up 442.6% over the same period a year ago.
The company also raised its estimate for 2019 digital entertainment growth and is now forecasting revenue between $1.6 billion to $1.7 billion, which would represent a 142%-to-157.2% jump over 2018. That's up from previous revenue guidance of $1.2 billion to $1.3 billion for 2019, Sea Ltd. said.