What the bulls will tell you about that plan

First and foremost, Sea has been reining in Shopee's expenses by shutting down its operations in India, reducing its presence in Latin America -- which is still dominated by $MercadoLibre(MELI.US)$ -- and downsizing its core Southeast Asian business with layoffs in Singapore and Indonesia. Those efforts could gradually right-size its business, narrow its losses, and free up more resources for expanding SeaMoney across Southeast Asia.

As for Free Fire, it's still the highest-grossing mobile game in Southeast Asia and Latin America. Garena believes its strategies could stabilize its growth in a post-pandemic market and buy it more time to develop fresh games.

Lastly, Sea can afford to operate at a loss for the foreseeable future. It raised more than $6 billion last year in a big stock and convertible bond sale, and it ended last quarter with $6.5 billion in cash and equivalents.

Analysts still expect Sea's revenue to grow by at least 20% annually over the next few years. That's an impressive growth rate for a stock that trades at less than three times this year's sales.