A few months ago, Forrest Li was the richest person in Singapore with a $US22 billion ($32 billion) fortune. Now, he is one of the greatest losers from a market crisis that has reduced the wealth of the world's 500 richest individuals by more than $1 trillion this year.
It has been a string of misfortunes for the creator of Sea Ltd: the tech sell-off, the closure of its primary e-commerce operation in India, and poor results have caused the company's American depository receipts to plummet by more than 80 percent from October's peak.
He is still wealthy, with a net worth of $US4.7 billion according to the Bloomberg Billionaires Index, but he no longer qualifies as one of the world's top 500 richest people.
Traders anticipate further bad news. According to the average analyst forecast given by Bloomberg, the business is anticipated to suffer a record loss of more than $US740 million when it reports first-quarter results later on Tuesday. Sea's net loss worsened in the final three months of the previous year as the company accelerated its expansion.
The decline illustrates the fragility of the rapid wealth creation in the early phases of the COVID-19 pandemic, when internet titans such as Sea's e-commerce and gambling profited from increased demand for their services. The decline of growth stocks is exacerbated by rising interest rates and war-related anxieties in Ukraine.
"Sea will face significant difficulties in 2022," said Shawn Yang, managing director of Blue Lotus Capital, a Hong Kong-based independent equities research company that lowered the stock's price target from $US180 to $US105 on May 10.
Mr. Yang stated that the company's e-commerce sales, its primary source of revenue, could fall short of its annual guidance of $US8.9 billion to $US9.1 billion as it faces intensifying competition from rivals such as Alibaba and as consumers return to offline stores due to the easing of COVID-19 restrictions.
In addition to Mr. Li, a large number of IT entrepreneurs whose fortune increased as a result of the pandemic-induced expansion are being severely impacted by the market decline. Eric Yuan, CEO of Zoom, has lost $US4.4 billion in wealth this year, while Amazon's Jeff Bezos, the second-richest person in the world, has lost about $US58 billion. Ernie Garcia II and Ernie Garcia III, father and son who manage the used automobile firm Carvana, have lost a combined $15 billion.
The devaluation of Sea in March caused the relatively low-profile Mr. Li to contact his employees. In a 900-word internal message, he advised them not to be afraid and that, although the decline was painful, "this is short-term suffering we must undergo in order to maximize our long-term potential."
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