We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
Sea Limited (SE)
Shares of Sea Limited traded down more than 18% on Monday after the Indian government ordered a ban on more than 54 Chinese apps over concerns about privacy and security and then rebounded 16% on Tuesday in response to a report on app rankings. Among the apps banned was Garena Free Fire, Sea’s Battle Royale mobile game. That said, despite the ban on Garena in India, according to Sensor Tower, Sea’s ecommerce app Shopee was #2 and Garena Free Fire MAX, the high-end version of the game, #3 in overall Google Play store rankings on February 18. While regulatory uncertainty shrouds Sea's growth potential in India, we believe the company could continue to take share in Southeast Asia and expand across Latin America and Europe. Sea Limited provides ecommerce, digital entertainment, and fintech platforms across emerging markets.
注: 在印度政府因担心隐私和安全问题下令禁止超过54个中国应用程序后，Sea Limited的股价周一下跌超过18%，然后在周二因一份关于应用程序排名的报告而反弹了16%。被禁止的应用程序中包括Garena Free Fire，Sea的大逃杀手机游戏。也就是说，尽管Garena在印度被禁，但根据Sensor Tower的数据，2月18日，Sea的电子商务应用Shopee排名第二，Garena Free Fire MAX，即高端版本的游戏，在Google Play商店整体排名中排名第三。虽然监管的不确定性笼罩着Sea在印度的增长潜力，但我们认为该公司可以继续在东南亚抢占份额，并在拉丁美洲和欧洲扩张。Sea有限公司在新兴市场提供电子商务、数字娱乐和金融技术平台。
Shares of Roblox traded down nearly 27% on Wednesday after the company reported fourth quarter results. Total bookings in the US and UK faced reopening headwinds and missed analyst expectations. Having paid $500 million to its young developer community and continuing to lower barriers to creation with Roblox Studio, Roblox should continue to increase its share of the developer and gamer communities. Roblox provides a creator-first digital entertainment platform and 3D engine that allow third-party developers to create games and experiences for users globally.
Shares of Palantir fell nearly 16% on Thursday after the company reported fourth quarter earnings. While surpassing revenue expectations with 34% year-over-year growth thanks to success in US commercial, Palantir reported a significant deceleration in growth in the larger government division, suggesting perhaps a change in government procurement behavior. Palantir provides software platforms that facilitate data analysis, organization, and storage in the public and private sectors.
Shares of DraftKings traded down 21% Friday after the company reported fourth quarter earnings and provided full year EBITDA guidance that missed analysts’ consensus expectations. According to management, if it were to stop investing in states as they open up for mobile sports betting, DraftKings could reach EBITDA profitability by the fourth quarter. With 32% share of total handle for mobile sports betting in states where it operates today, and 20% share of gross revenue for iGaming, DraftKings seems likely to find continued success as the legalization of mobile sports betting expands from the 17 states today. DraftKings’ decision to invest aggressively in its media business, NFT marketplace, and social features should increase customer engagement, retention, and monetization. DraftKings offers mobile sports betting, sports entertainment, and iGaming platforms in the US.
Shares of Roku traded down 22% Friday after the company reported fourth quarter earnings with lower than expected 33% revenue growth and guidance for further deceleration to 25% for the first quarter. Management cited supply chain bottlenecks and inventory shortages at its TV OEM partners that have impacted sales of smart TVs. Management noted that active accounts increased to more than 60 million, surpassing the number of video subscribers combined at all the cable companies in the US. Although US consumers spend 45% of their viewing hours on streaming TV today, advertising on streaming TV accounts for only 18% of total TV advertising budgets, a gap we expect to close. Roku is the leading TV operating system in the US and is beginning to scale internationally.