10 Best Esports Stocks to Buy Now

4. Sea Limited (NYSE:SE)

Number of Hedge Fund Holders: 58

Sea Limited (NYSE:SE) is a major technology corporation that has a strong presence in the global esports industry through its gaming division, Garena. Based in Singapore, it was founded as a game development and publishing company. Sea Limited (NYSE:SE) is known for its popular Free Fire title, which is one of the top mobile battle royale games. Through its Garena division, the company also organizes esports events that range from local grassroots tournaments to major professional events.

SaltLight Capital, an investment management company, in its “SaltLight SNN Worldwide Flexible FR Fund” third quarter 2024 investor letter highlighted Sea Limited (NYSE:SE) and its successful Free Fire title. The letter noted that Free Fire has an impressive 648 million quarterly active users and 53 million paying players who spend an average of $42 annually. The large audience is attributed to the game design which allows it to be played on lower-specification phones, which are common in emerging markets.

The investment management firm noted that Sea Limited’s (NYSE:SE) Free Fire is a profitable business. The Q3 2024 investor letter pointed out that over the last 12 months, Sea Limited (NYSE:SE) generated $1 billion in EBITDA with 50% margins. SaltLight Capital believes that Free Fire is a phenomenal business that has the ability to grow without significant capital expenditure.

In Q3 2024, Sea Limited (NYSE:SE) reported that Free Fire had more than 100 million daily active users throughout the quarter. This represented an impressive 25% year-on-year growth. Sea Limited (NYSE:SE) also held a major e-sports tournament in Morocco that saw thousands of teams participating and attracted millions of views on social media.