Buy the rumor, sell the news!

Does earnings report affect stock price?

This really depends on many factors.

Let's take $Sea(SE.US)$ as an example.

$Sea(SE.US)$ started back in 2009 as Garena, providing gaming and digital entertainment services. In 2014, it started AirPay, a digital payment services and in 2015, it operates Shopee, an e-commerce business.

Talking about Shopee, I hope you all have enjoy the Shopee vouchers early this month in MooMoo apps. This is one of the great initiatives by MooMoo, thru partnership between $Futu Holdings Ltd(FUTU.US)$ MooMoo and $Sea(SE.US)$ Shopee. It also shows that MooMoo does really heard your feedback as discussed in one of our favourite Treasure Boxes post.

Back to our topic, although $Sea(SE.US)$ have 3 business models - Gaming, Payment and E-commerce, its negative EPS value does not reflect that the business is profitable.

However, $Sea(SE.US)$ share price have manage to grow at least 10 times, from USD 30+ (before 2020), to USD 300+ this year 2021.

Not only does its share price have grow exponentially, its revenue has also beat its 2021 Q2 forecast, as shown in MooMoo app below.

Moving towards to 2022, $Sea(SE.US)$ will be operating a digital bank in Singapore, after being awarded the digital full bank licence by MAS in 2020.

Digital bank is expected to be much efficient and having lower cost than traditional banks, due to less spending on rent and manpower, as it operate purely online via Internet or mobile apps.

New digital banks operators will have many advantages such as able to offer accounts without minimum deposit amount and no fees (such as no fall-below fees).

It may also offer no minimum income for its credit cards, multi-currencies accounts, higher saving account interest than traditional banks, and also allow its users to use Singpass MyInfo to create multiple different accounts for different saving and spending needs.

Just like Remy in the movie 'Ratatouille' who is not afraid to add something unexpected to elevate the dish, $Sea(SE.US)$ will be able to elevate their revenue by adding digital banking into their business.

Given that much of the information here may have already push up the $Sea(SE.US)$ stock price, thus the adage "buy the rumor, sell the news", will likely to be expected. The share price may drop even if $Sea(SE.US)$ 2021 Q3 earning reports is reflecting better revenue gain. However, fret not, given some time, the price will recover and may even move much higher.

Lastly, I feel that the next business they might go after will be digital remittance. This will help foreigners working overseas to be able to transfer their money to their loved ones fast and secure.

Before I end this post, I would like everyone to vote if $Sea(SE.US)$ can be the next $Amazon(AMZN.US)$.