Shares of Sea, South-east Asia's most valuable company, fell after reporting third-quarter financial results that showed signs of a slowdown in e-commerce growth.
The Singapore-based company owns e-commerce platform Shopee and game developer Garena.
Its revenue doubled to US$1.2 billion (S$1.6 billion) for the quarter and it boosted annual forecasts for two key businesses. But net losses also doubled to US$419.9 million and quarter-on-quarter growth in e-commerce gross merchandise value dropped to 16 per cent, from 29 per cent in the second quarter.
Sea shares slid 4.3 per cent in US trading. The stock is still up more than 300 per cent for the year.
"The results were disappointing," said Mr Nirgunan Tiruchelvam, head of consumer sector equity research at Tellimer. "This suggests that the market's grand expectations of high growth in the e-commerce segment are misplaced."
Sea has emerged as a stock market sensation since its initial public offering (IPO) in 2017, a wager the money-losing company can establish itself as a leader in e-commerce and gaming in South-east Asia. Its shares have surged about 1,400 per cent since the start of last year, pushing its market value to more than US$80 billion.
The rally has minted at least three billionaires at the company. Chief executive officer Forrest Li's net worth is estimated at US$9.4 billion, according to the Bloomberg Billionaires Index.
While reporting its financial results, Sea said it now forecasts its digital entertainment business will surpass revenue of US$3.1 billion, compared with an earlier estimate of as much as US$2 billion. Its e-commerce business is now expected to exceed US$2.3 billion, up from as much as US$1.8 billion.
Revenue at Garena increased 73 per cent to US$569 million, reflecting the sustained popularity of mobile battle royale game Free Fire.
Revenue from Shopee and other services climbed 113 per cent to US$489.5 million.
Sea's total sales and marketing expenses in the third quarter increased 87 per cent to US$471 million.
Starting with its earnings release for the third quarter, Sea is discontinuing reporting adjusted revenues and making other changes to its accounting methodology in response to Securities and Exchange Commission inquiries.
Since its IPO in New York, Sea had been encouraging investors and analysts to focus on financial metrics that are not in compliance with the generally accepted accounting principles, or GAAP.
Chief corporate officer Yanjun Wang said in August that for Garena, the company will provide another operating metric of "bookings", which is GAAP revenue plus changes in deferred revenue.
Sea's digital payments and financial services unit, SeaMoney, gained traffic in the third quarter as people spent more time and money online.
Its total payment volume for the quarter exceeded US$2.1 billion, from US$1.6 billion during the June quarter.