Sea announces first-ever share buyback of up to US$1 billion

[SINGAPORE] Consumer Internet company Sea Ltd on Monday (Nov 17) announced its first-ever share repurchase programme under which it may buy back up to US$1 billion of its American depositary shares.

“The timing and amount of any share repurchases under the authorisation will be determined based on market conditions and other considerations,” said Sea in a press statement.

Citi analyst Alicia Yap noted that the programme demonstrates the confidence that Sea’s management has in the company’s long-term growth.

“We believe Sea’s management has been agile in assessing the operating environment and investing strategically to strengthen its competitive moat in each market,” added Yap. “We believe Sea is better-positioned than its peers to step up investment and maintain its leadership gap.”

The share buyback may include open market purchases, privately negotiated transactions, block trades, derivative transactions, trading plans, or any combination of such methods.

The New York Stock Exchange (NYSE)-listed company noted that the programme demonstrates its “confidence in its long-term prospects”, and will allow it to opportunistically repurchase its shares.

Morningstar analyst Chelsey Tam said last Wednesday that Sea’s stock remained undervalued, with the “market yet to fully reflect its long-term growth potential”.

Shares of Sea on NYSE closed 0.6 per cent up at US$140.85 on Friday.

The company reported a 144.6 per cent rise in its third-quarter earnings to US$375 million on Nov 11, up from US$153.3 million in the year-ago period.

In October, Sea founder Forrest Li told his employees that the tech conglomerate could hit a US$1 trillion market capitalisation at some point, thanks to artificial intelligence.

Sea owns digital entertainment company Garena, e-commerce platform Shopee and the digital financial services firm Monee.