Unusual Options Activity In Sea Limited

Sea Limited engages in the digital entertainment, e-commerce, and digital financial service businesses in the Greater Southeast Asia. The company operates through three segments: Digital Entertainment, E-commerce and Digital Financial services. Its digital entertainment platform provides users to access mobile and PC online games, and eSports operations and live streaming of online game play and social features.

Several weeks ago, Sea Limited reported a fourth-quarter 2018 loss of $0.81 / share, but the stock jumped because the results were better than anticipated.  I think the highlight of the earnings call was revenues surged 136.6% year over year to $389.3 million.  In addition, quarterly active users in the digital entertainment segment more than doubled to 216.2 million, with average revenue per user of $1.10.

And after a successful launch of its self-developed game, Free Fire which was the fourth most downloaded game globally across the Apple App Store and the Google Play Store combined in 2018.  More than 40 million players log on each day to find weapons and battle it out

The company also rolled out its first global eSports tournament for Free Fire in 2018 well.

All this traction has made Chinese-born founder Forrest Li, who is 41 years old and who owns 14% of Sea Limited, worth $1 billion on paper. 

I only became aware of Sea Limited when I noticed usual options activity on Monday.  And these bullish call options have a strike price that is $7 away from current price, but they expire in 36 days.

I can’t find any news as to what might be a catalyst, but since I have been following unusual options activity, something tells me they are going to be potentially acquired or some favorable regulation is going to go into effect. Should be an interesting next four weeks for Sea Limited.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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