Sea Limited (SE) Stock: Why It Fell 7% on Cloud and Monee Plans

Quick answer

Sea Limited stock fell 7.3% to $82.05 at 11:50am ET on Oct 20, 2026, from an $88.47 close on Oct 19, after reports on a memo from Chairman and CEO Forrest Li set out two new plans with no numbers attached. Li wrote that Sea will offer its in-house cloud platform to other companies as Sea Cloud, "an AI-first enterprise platform," and that going public "could give" its Monee financial services unit "the resources and the room to go further and faster than it can today." The Wall Street Journal reported that Li gave no timetable for a Monee IPO and no details on its structure or size. Sea filed the memo with the SEC at 6:00am. Investors sold the spending a cloud business against Amazon Web Services and Alibaba could require, and gave little credit for a listing that may be years away. The drop followed a 5.7% fall on Oct 19, leaving the stock down 12.5% in two sessions.

Our view: Bullish through November 10, 2026, the date analysts expect Sea to report third-quarter results (the company has not confirmed it). The case against is real. Sea Cloud puts the company into a capital-heavy market against much larger rivals, and the memo gave no cost, so the spending risk is open-ended. Monee's growth has come with higher credit costs: provisions rose 71.5% in the second quarter. And Shopee faces Temu, TikTok Shop and Lazada, which led DBS to cut the stock to Hold with a $105 target on Oct 2. The case for it carries more weight into the report. The memo disclosed no new spending figure, and Sea bought $495 million of property and equipment in the first half against $2.56 billion of operating cash flow. Monee earned $288.0 million of adjusted EBITDA in the quarter, 31% of Sea's total, and a separate listing would give it its own price. All three businesses are profitable, management expects Shopee to reach about $1 billion of adjusted EBITDA this year, and the stock trades at about 17 times forward earnings after a 52% fall from its high. We would move off Bullish if third-quarter capital spending or guidance shows Sea Cloud adding several hundred million dollars a year, if Shopee's adjusted EBITDA falls short of a path to $1 billion for 2026, or if Monee's 90-day non-performing loan ratio rises above 1.0%. This is a view on direction over that window, not a recommendation to trade the stock.

Sea Limited daily closing price from Sep 8 to Oct 20, 2026, with the Oct 2 DBS downgrade, the Oct 16 close and the Oct 20 memo marked

Key takeaways

Sea Limited fell 7.3% to $82.05 at 11:50am ET on Oct 20, 2026, from an $88.47 close, after the Wall Street Journal, Reuters and Bloomberg reported a memo from CEO Forrest Li that Sea filed with the SEC at 6:00am.
The memo said Sea will launch Sea Cloud, an AI-first enterprise platform, and that going public could give the Monee financial services unit the resources to grow faster. It gave no timetable, size, structure or cost for either.
Investors sold the open-ended spending of a cloud business that competes with Amazon Web Services and Alibaba, and discounted a Monee listing that may be years away. Peers such as Grab, MercadoLibre and Coupang were flat to slightly higher.
Monee produced $288.0 million of adjusted EBITDA in the second quarter, 31% of Sea's total, on a $11.1 billion loan book with non-performing loans at 1.0%.
Our view is Bullish through November 10, 2026, the date analysts expect third-quarter results: a two-day drop of 12.5% priced in costs the memo never stated, while Sea earns money in all three businesses and holds $9.1 billion of cash and short-term investments.

Table of contents

Oct 20, 2026: a cloud launch and a Monee IPO idea, with no numbers
What the memo said
The numbers
The bull case
The risks
What comes next

Oct 20, 2026: a cloud launch and a Monee IPO idea, with no numbers

By 12:19am New York time, Reuters had reported the memo, which reached employees on Tuesday in Singapore. The stock first rose in premarket trading, from $89.50 at 4am to $90.97 at 5:15am, up 2.8%. It turned lower after 6am, when Sea filed the memo on a Form 6-K, and the Journal's report followed. By 8:45am it was $86.00.

It opened at $85.52 and touched the day's high of $86.43 in the first minutes, then fell to $81.77 by 9:55am. It traded between about $82 and $83.60 for the rest of the morning and reached the day's low of $81.55 at about 11:10am. At 11:50am it was $82.05, down 7.3%, on 7.4 million shares.

What pushed it down:

An open-ended cloud bet. Li wrote that Sea has run its own cloud for more than ten years and that about 500 employees spent two years rebuilding it for AI. Bloomberg noted that selling it to outside companies puts Sea in direct competition with Amazon Web Services and Alibaba's cloud arm. The memo named no launch date, customers, pricing or budget. Maybank, which cut its target to $150 from $155 on Oct 19, was already assuming higher capital spending for Sea's AI plans, Ad-hoc News reported, though it called the spending manageable.
A listing with no date. "We believe Monee is approaching the point where it can stand on its own two feet," Li wrote. Reuters called it a plan to list Monee. Bloomberg and the Journal described a possibility under consideration. A listing that has no timetable or size gives investors little to value today.
A stock already under pressure. Sea had closed lower on the two previous sessions, including the 5.7% drop on Oct 19 with no company news. At $82.05 the stock was down 35.7% from its $127.57 close on Dec 31, 2025.

Sea's peers did not follow it down, so the drop was about Sea's own news. At about 11:50am, against the Oct 19 close:

Stock or fund	Change
MercadoLibre (MELI)	+0.8%
SPDR S&P 500 ETF (SPY)	+0.4%
Grab (GRAB)	+0.3%
KraneShares China Internet ETF (KWEB)	+0.3%
Coupang (CPNG)	+0.1%
Alibaba (BABA)	0.0%
Sea Limited (SE)	-7.3%

After the drop, RSI(14) stood at 23, the shares sat 23% below their 50-day average and 19% below their 200-day average, volume by midday was already 1.6 times its 20-day average of 4.5 million shares, and the stock was 52% below its 52-week high of $171.09 and 6% above its 52-week low of $77.05. For other names moving today, see today's biggest stock moves.

What the memo said

The memo marked nine years since Sea listed on the New York Stock Exchange on Oct 20, 2017. Li compared the latest quarter with the quarter of the listing: Garena's quarterly active users rose to 666 million from 69 million, Shopee's quarterly GMV to $38.3 billion from $1.1 billion, and quarterly revenue to $7.8 billion from $94 million. "All three of our businesses are well-scaled, profitable, and still growing," he wrote. On listing, he added, "We may well ring that bell again!"

On the cloud, Li wrote that the platform "was never a side project" and that Sea will "offer that capability to the world." He compared the moment to building Shopee for mobile when rivals were still thinking in terms of websites: "We believe AI is that moment again."

The numbers

Sea's second-quarter results, for the quarter ended June 30, 2026, show where the value sits.

	Q2 2025	Q2 2026	Change
Total revenue	$5.26B	$7.79B	+48.1%
Net income	$414.2M	$458.1M	+10.6%
Shopee adjusted EBITDA	$227.7M	$255.4M	+12.2%
Monee adjusted EBITDA	$255.3M	$288.0M	+12.8%
Garena adjusted EBITDA	$368.2M	$429.8M	+16.7%
Provision for credit losses	$323.7M	$555.2M	+71.5%

Bar chart of Sea's second-quarter 2026 adjusted EBITDA by unit: Garena $429.8 million, Monee $288.0 million and Shopee $255.4 million

Monee's revenue was $1.4 billion, 18% of the group, but it produced 31% of adjusted EBITDA. Its loan book was $11.1 billion, up 62.5%, with $10.0 billion on Sea's balance sheet. On the August call, management tied the rise in credit provisions to more lending outside Shopee and in Brazil. Other Services, the small businesses outside the three units, lost $46.2 million of adjusted EBITDA, against $13.8 million a year earlier.

At June 30, Sea held $3.53 billion of cash and $5.57 billion of short-term investments, against $1.22 billion of borrowings and $996 million of convertible notes. It bought back 4.7 million shares for $416.8 million in the quarter.

The bull case

The memo changed plans, not numbers. No spending figure, launch date or listing size was disclosed. The cloud platform already exists and already carries Sea's own businesses.
Monee could get its own price. A separately listed Monee would report its own results, and investors could value it apart from Shopee and Garena. Our explainers on spin-off investing and why conglomerates trade at a discount cover how that can close a gap, and our guide to a sum-of-the-parts valuation shows how to add up the units.
A cheaper stock. At $82.05, the market value is about $46.5 billion, and the forward P/E is about 17. Our explainer on forward versus trailing P/E covers what that measure leaves out.
Analysts sit well above the price. The consensus target is $155.60, and Maybank kept its Buy rating with a $150 target.

The risks

Cloud spending. Competing with Amazon Web Services and Alibaba usually means heavy spending on data centers and chips. Sea has not said how much it will spend or how it will fund it.
Credit risk in the open. A Monee listing would put its lending results in a separate filing. Provisions already rose faster than Monee's revenue in the second quarter, and the CFO called Brazil a "high interest, high risk market" on the August call.
Shopee competition. DBS cut its target to $105, citing Temu, weaker Asian currencies and soft consumer confidence in Indonesia, Shopee's largest market, and expects GMV to fall slightly short of consensus.
A changed EBITDA measure. From the third quarter, Sea will exclude the change in Garena's deferred revenue from adjusted EBITDA, which makes comparisons with past quarters harder.

What comes next

Third-quarter results, expected Nov 10, 2026. Sea has not confirmed the date; last year it issued a notice on Oct 27 for a Nov 11 report. Maybank expects revenue of $8.04 billion, up 34%, and adjusted EBITDA of $964 million. Our explainer on earnings catalysts covers how to prepare.
Any spending plan for Sea Cloud. The results call is the first chance for management to put a number on the cloud business.
Detail on a Monee listing. A venue, timetable or the hiring of banks would make the IPO concrete.
Shopee's path to $1 billion. Management expects second-half Shopee adjusted EBITDA to exceed the first half.

Frequently asked questions

Why is Sea Limited stock down today?

Sea fell about 7% on Oct 20, 2026, after reports on an internal memo from CEO Forrest Li. The memo said Sea will offer its in-house cloud platform to outside companies as Sea Cloud, an AI-first enterprise platform, and that Monee could go public. The Wall Street Journal reported that Li gave no timetable for an IPO and no details on its structure or size. Investors read the cloud plan as new spending in a market led by Amazon Web Services and Alibaba, with no cost attached.

Is Sea Limited spinning off Monee?

Not yet. The memo, filed with the SEC on a Form 6-K, says Monee is approaching the point where it can stand on its own and that going public could give it more resources. Reuters described it as a plan to list Monee, while Bloomberg and the Wall Street Journal described a possibility being considered. No timetable, structure or size has been disclosed.

What is Sea Cloud?

Sea Cloud is the name for the cloud platform Sea has run internally for more than ten years to power Shopee, Garena and Monee. Li wrote that about 500 employees spent the last two years rebuilding it for AI applications, and that Sea will now offer it to other companies as an AI-first enterprise platform. Sea has not given a launch date, pricing or a spending plan.

How big is Monee?

In the second quarter of 2026, Monee had revenue of $1.4 billion, up 58.9%, and adjusted EBITDA of $288.0 million, up 12.8%. Consumer and SME loans outstanding were $11.1 billion, up 62.5%, and loans more than 90 days past due were 1.0% of the book. Provisions for credit losses across Sea rose 71.5% to $555.2 million.

Why did Sea stock fall on Oct 19 too?

Sea fell 5.7% on Oct 19, before the memo, with no company announcement. Maybank kept a Buy rating that day but cut its target to $150 from $155, and on Oct 2 DBS had cut the stock to Hold with a $105 target, citing competition from PDD's Temu, weak Asian currencies and soft consumer confidence in Indonesia.

When does Sea report third-quarter results?

Sea has not announced the date. Analysts expect Nov 10, 2026, before the U.S. open. Sea usually issues a notice about two weeks ahead; last year it announced on Oct 27, 2025 for a Nov 11 report.

Sources

Article details

By James Whitfield, Head of Equity Research, Dombey Capital

Published October 20, 2026 · 7 min read · Event-Driven Investing