Sea Limited's sales were short of forecasts, and the e-commerce and gaming site warned of future losses because of new spending.
Sales at its key Shopee retail site missed estimates.
CEO Forrest Li said plans to boost investment in e-commerce may lead to the company posting losses in certain periods.
Shares of Sea Limited (SE) tumbled more than 28% in early trading on Tuesday after the Singapore-based online retail and gaming site missed sales estimates and indicated it plans to increase spending on e-commerce, which may lead to losses in the future.
The operator of the Shopee retail site and Garena gaming platform reported second quarter revenue rose 5.2% to $3.1 billion, missing forecasts. Earnings per share (EPS) of $0.54 was better than expected.
Sales at Shopee, which accounts for about two-thirds of the firm’s revenue, increased 20.6% to $2.1 billion, but that also was short of predictions. Revenue at the digital entertainment unit, which includes Garena, dropped 1.9%, while the financial services division had a jump of 53.4%.
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