Sea Founder Reaps $915 Million One-Day Gain With Surprise Profit

(Bloomberg) -- Sea Ltd.’s stunning 22% pop tacked on more than $900 million to the personal wealth of founder Forrest Li, a vindication for the Chinese-born internet tycoon who presided over the worst year in his company’s history.

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Southeast Asia’s largest internet firm racked up its biggest single-day gain in months after reporting a surprise profit on Tuesday — energizing investors who’d hoped the gaming and e-commerce giant would pull off one of the biggest turnaround efforts the region’s fledgling tech sector has ever witnessed.

That means Li is now worth about $5.3 billion, according to the Bloomberg Billionaires Index, putting him back on par with peers such as Kakao Corp.’s Brian Kim and Shein impresario Gu Xiaoqing. The entrepreneur has grown $1.8 billion wealthier this year after Sea fired thousands, froze salaries and pledged to rein in spending.

The initial optimism belies the scale of the task ahead for Li, a gaming enthusiast who in 2009 founded a company that’s come to symbolize Southeast Asia’s internet ascendancy. Despite Tuesday’s surge, growth has all but evaporated from just two years ago, when it was regularly notching triple-digit revenue gains during a pandemic-era online boom.

Read more: Singapore’s Sea Soars 22% After Reporting Surprise First Profit

At the time, investors piled into the company, which is backed by Chinese internet giant Tencent Holdings Ltd., briefly making it the world’s best-performing stock. Then came a post-Covid hangover, when fears of a global recession wiped out more than $160 billion of its value from a 2021 peak of more than $200 billion.

Much of the profit reported Tuesday came from brutal cost cuts — a more than $700 million reduction in marketing expenses alone — and on-paper gains from the way it accounted for debt and certain types of expenses. During a post-release conference call, several analysts questioned whether the company had a plan to rejuvenate growth — suggesting concerns about whether a pullback in spending might jeopardize the top line in the future.