Here’s Why Baron Funds Disposed its Sea Limited (SE) Stake

Baron Funds, an asset management firm, published its “Baron New Asia Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron New Asia Fund (the “Fund”) declined 15.24% (Institutional Shares) during the first quarter of 2022, while its principal benchmark index, the MSCI Asia ex Japan Index, declined 7.99%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Baron New Asia Fund mentioned Sea Limited (NYSE:SE) and explained its insights for the company. Founded in 2009, Sea Limited (NYSE:SE) is a Singapore-based global consumer internet company with a $42.8 billion market capitalization. Sea Limited (NYSE:SE) delivered a -65.90% return since the beginning of the year, while its 12-month returns are down by -72.53%. The stock closed at $76.28 per share on June 10, 2022.

Here is what Baron New Asia Fund has to say about Sea Limited (NYSE:SE) in its Q1 2022 investor letter:

“Sea Limited, a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long- term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”

Our calculations show that Sea Limited (NYSE:SE) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Sea Limited (NYSE:SE) was in 77 hedge fund portfolios at the end of the first quarter of 2022, compared to 108 funds in the previous quarter. Sea Limited (NYSE:SE) delivered a -16.21% return in the past 3 months.

In April 2022, we also shared another hedge fund’s views on Sea Limited (NYSE:SE) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.