Marking the 6th Anniversary of our IPO

2023-10-20

Dear Sailors,

Six years ago today, on Oct 20th 2017, we became a publicly listed company on the New York Stock Exchange. As I wrote to you last year, it was one of the most thrilling days of my life. Even today, just the memory of ringing the opening bell that morning still fills me with excitement!

A couple of weeks ago, I had lunch with some Sailors. As we ate, one Sailor asked, “Hey Forrest, do you ever feel regret about bringing Sea public?” The question took me by surprise. I have always thought of our IPO as a fantastic milestone for our company; an achievement to feel proud of. I immediately replied, “Not at all!”

Over the next few days, though, the question stayed with me. I realized that some of you may have the same question in your mind. So, I would like to take our IPO anniversary as an opportunity to share my thoughts about it with you.

Being a public company certainly requires a lot more work than being a private company. Every quarter, we are obligated to report our earnings, tell the world about our performance, answer our investors’ questions, and then await judgement from the market. It’s almost like having to sit for examinations four times a year! Adding to that the rollercoaster ride our share price has taken over the last four years, it is natural to wonder whether we should have gone public – especially when many of our competitors are still private companies.

I believe that going public was a great decision. We were able to raise around $10 billion from the public capital market, which we used to scale our businesses at a speed that would have been otherwise impossible. This was transformational! It let us fulfill what, in our early years, had been just a wild dream: to use technology to bring joy to people all around the world, and especially to under-served communities. I feel proud that we put the capital we raised to good use, making a difference to hundreds of millions of lives. It is an amazing achievement.

Exposure to the market has also accelerated our learning, especially because the last four years (two thirds of our time as a public company!) have seen such extraordinary world events. The first ever global pandemic, the largest land war in Europe since WWII, and the highest inflation rates in forty years. In just our first few years as a very young public company, we have gone through a generation’s worth of ups and downs. And although it was sometimes painful, this extra-tough journey has given us insights that, in more normal times, might have taken one or two decades to learn.

Being on the market keeps us on our toes, giving us an external point of view that we can use to strengthen our own thinking. When the market’s feedback aligns with our plans, it gives us confidence. When it does not, it pushes us to think harder: is there more we need to consider?

Importantly, this is not to say that the market is always right. In his 1987 letter to Berkshire Hathaway shareholders, Warren Buffet shared a piece of wisdom about the market from his friend and teacher Ben Graham:

“The market may ignore business success for a while, but eventually will confirm it. As Ben said: ‘In the short run, the market is a voting machine but in the long run it is a weighing machine.’ The speed at which a business’s success is recognized, furthermore, is not that important as long as the company’s intrinsic value is increasing at a satisfactory rate.“

I agree completely with this view. If we can continually create value for our customers, this will inevitably create value for our shareholders and for ourselves. The market may not recognize what we do immediately – in the short run, it is a volatile voting machine – but in the long run, as a weighing scale, it will correctly value our business’s quality.

When navigating the choppy waters of the capital markets, it is important to have a north star to follow. Our north star is a devotion to our customers, and an unwavering commitment to use technology to improve lives. No matter what else is happening, staying focused on this goal is, in the end, a winning strategy. Let’s work on building up our company’s intrinsic value – and rest assured that the market, when it’s ready, will catch up with us.

Happy IPO anniversary, Sea!

Sincerely,
Forrest