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

·2 min read

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."

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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.