SESeaNeutralSea

Today on

Wild ride for $SE. Down 10% pre market. Up 8% intraday at one point. Now flat. Totally normal.

NeutralSESeaSeaMELIMercadoLibreMercadoLibre

Yesterday on

The chart shared by @Brian_Stoffel_ below caught my interest. $SE $MELI For three quarters in a row, $SE's Shopee sales and marketing spend grew 40%, 57%, and 60% while GMV growth slowed from 30% to 23%. My first instinct was to think some e-commerce marketing simply pays off with a delay, so I pulled the same numbers for Mercado Libre to get a feel for it (I was too lazy to add Q2 and Q3 to my NotebookLM file, so keep that in mind). MELI went through a similar step-up in spending. Consolidated group S&M (so it's not as clean; it also funds Mercado Pago customer acquisition, especially the credit card push, so not every dollar targets commerce GMV) ran at roughly 4.2% of GMV throughout 2024, crept up to around 4.6% in 2025 and jumped to 5.75% in Q4 2025 and 5.2% in Q1 2026. Over the same stretch, GMV growth in USD went from 8% to 42%. A decent chunk of that acceleration is currency. In FX-neutral terms, growth stayed in the mid to high 30s for most of 2025, with a spike to 45% in Q4. Still, MELI’s extra spending came with growth that held up and improved. Shopee’s own history is the better test of the lag idea. When it ramped up S&M in the second half of 2023, GMV responded within a quarter and swung from -5% to +28%. When it cut S&M back to negative growth in late 2024, GMV kept growing at around 24%. To me that suggests the payoff from e-commerce marketing arrives quickly and fades slowly. Habits bought with vouchers stick around for a while. That makes the current picture hard to explain away as a lag. Shopee has now spent three quarters at 40%+ S&M growth while GMV decelerates. TikTok Shop has grown its share of the combined Shopee, TikTok Shop and Lazada GMV in Southeast Asia from 17% in 2023 to 39% in H1 2026. In Brazil, Shopee is fighting MELI, TikTok Shop and Temu at the same time. A large part of Shopee’s marketing line is vouchers and coins, which act like price cuts. TL;DR: At a quick glance, $MELI looks like spending that is being converted into growth, while $SE right now looks like spending that is mostly holding ground.

SESeaNeutralSea

Yesterday on

More color on Sea Cloud $SE: "We want to build it to become a sustainable business, become a part of our businesses permanently. That is the aspiration. We do believe this will generate a very, very meaningful, a very, very sizable revenue and profit for us down the road.“ https://t.co/8ueLHzYwNt https://t.co/IYGCUVtkIh

SESeaNeutralSea

Yesterday on

Key comments made on $SE’s cloud ambitions on today’s call: Sea Cloud is, in management's own words, "a kind of a startup." The idea is to take the AI capabilities Sea has built for its own operations over the past few years – fraud detection, customer service, content generation – and sell them to external customers. Management believes few organizations in the region have the in-house technical depth to build this from scratch, and expects falling token costs to accelerate adoption. What I appreciate is the candor about what they still don't know. The target segment, the customer type and the business model are all open questions, and management openly admitted: "I don't think at this moment we have a very clear, as a business, what the return on investment will look like." That honesty makes the capital allocation commentary the most important part of the answer for me. Management promised to be "very, very frugal in terms of the capital expenditure" and to judge every project and every deal bottom-up on its expected return. Management also reminded listeners that it took a decade to build the three existing businesses to today's stage, which tells me Sea Cloud is a long-dated option that is unlikely to move the numbers for years. On Monee: management confirmed the long-held ambition to turn it into a standalone financial services business with its own listing on a one to three year timeline. The reasoning is that Monee has reached a scale where it can sustain itself and now needs the flexibility to grow beyond the Sea ecosystem. For shareholders worried about value leakage, management was clear: "We are definitely not giving it away." The tight integration with Shopee will remain, and Sea will continue to act as SeaMoney's technical enabler. They stressed they are "not in any rush," and the eventual structure and ownership details will matter far more to me than the headline itself.

SESeaBullishSea

Yesterday on

These days, I'm always viewing earnings results through two lenses: 1️⃣ What is a market fixated on short-term results seeing? 2️⃣ What am I, as a long-term investor, seeing and focusing on? Looking at $SE's results, this is likely going to be a great illustration of what I'm describing. Let's wait and see where we open. Long-term investors should actually love that "perception gap"!