2. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 63
Sea Limited (NYSE:SE), based in Singapore, is a leading technology conglomerate with a strong foothold in the esports industry through its gaming division, Garena. It is recognized as one of the most valuable esports companies globally, primarily due to its popular mobile game, Free Fire. This title has garnered immense popularity, making it one of the top mobile battle royale games worldwide.
The company not only develops and publishes games but also organizes esports events on a global scale. Sea Limited’s (NYSE:SE) Garena division hosts competitions ranging from local grassroots tournaments to major professional events. A highlight was the Free Fire World Series 2021 in Singapore, which set a record with 5.4 million concurrent viewers.
In its second quarter of 2024, Sea Limited (NYSE:SE) reported impressive growth in its gaming and digital entertainment segment. The company achieved over 20% year-on-year growth in bookings, largely driven by Free Fire’s success. Sea Limited (NYSE:SE) reported that Free Fire had more than 100 million daily active users throughout the second quarter of 2024. Additionally, Free Fire was recognized as the most downloaded mobile game worldwide in Q2 2024 according to Sensor Tower.
The company is also expanding its gaming portfolio with the upcoming launch of Need for Speed: Mobile in Taiwan, Hong Kong, and Macau, in collaboration with Tencent and Electronic Arts. This expansion aims to engage its dedicated gaming community further.
The company’s digital entertainment segment reported bookings of $537 million in Q2 2024, reflecting a 21% increase from the same quarter in the previous year. The total number of active users rose to 648 million, up 19% year-over-year, while paying users reached 52.5 million, marking a growth of 21.7%.
In addition to its gaming and entertainment division, Sea Limited (NYSE:SE) operates Shopee, one of the largest e-commerce platforms in Southeast Asia and Taiwan, and SeaMoney, which provides digital financial services. This diversified business model allows the company to reduce reliance on any single area while benefiting from multiple revenue streams across gaming, e-commerce, and finance.
Overall, Sea Limited (NYSE:SE) generated total revenues of $3.8 billion in Q2 2024, a 23% increase compared to Q2 2023. The company also reported a gross profit of $1.6 billion and had $9 billion in cash and investments as of June 30, indicating strong financial health.
According to Insider Monkey’s Q2 2024 database, 63 hedge funds held stakes in Sea Limited (NYSE:SE). It ranks second on our list of the best esports stocks to buy according to hedge funds. Artisan Partners stated the following regarding Sea Limited (NYSE:SE) in its “Artisan Developing World Fund” third quarter 2024 investor letter:
“Top contributors to performance for the quarter included Southeast Asian e-commerce leader Sea Limited (NYSE:SE). Sea rose due to an improved competitive environment in its Shopee e-commerce business that set the stage for commission increases, while a positive inflection in its gaming business surprised market participants.”
