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MariBank, Singapore tech giant Sea Group’s digital bank, has launched in Singapore to select members of the public as it rolls out its services progressively.

Rafael Henrique | Sopa Images | Lightrocket | Getty Images

Southeast Asian tech giant Sea Limited on Monday posted its first profitable year amid efforts to defend market share against Alibaba-owned Lazada and TikTok.

Net income in 2023 was $162.7 million, as compared to a net loss of $1.7 billion in 2022. There was a net loss of $111.6 million in the fourth quarter of 2023, as compared to net income of $422.8 million in the same period a year ago.

“In 2023, we achieved profitability, strengthened our market leadership for our e-commerce business, grew our digital financial services business, and stabilized the performance of our digital entertainment business,” said Forrest Li, chairman and CEO of Sea, on Monday. Before that, Sea was largely unprofitable, amassing billions of dollars in losses since its inception in 2009.

Sea operates in Southeast Asian markets and has businesses in e-commerce (Shopee), financial services (SeaMoney) and gaming (Garena).

“We have emerged with a much stronger balance sheet with our cash position increasing to 8.5 billion dollars as of the end of 2023, demonstrating the discipline and prudence we have applied in our investments over the past year,” said Li.

Sea’s New York-listed shares closed 5.58% higher on Monday. Li said the firm expects 2024 to be a profitable year as well.

Sea’s e-commerce arm Shopee made a “meaningful gain in market share” in 2023 despite “intensified competition in Southeast Asia,” the firm said on Monday. Sea also said Shopee’s market share in the region has “solidified” and the firm intends to “maintain our market share in 2024.”

Shopee faces stiff competition from players like Alibaba-owned Lazada and Indonesia’s Tokopedia in the region. Tokopedia merged with TikTok Shop in Indonesia to form an enlarged Tokopedia entity, in which TikTok will take a controlling stake of 75.01%.

GoTo-TikTok deal: It's 'worrying times' for Southeast Asian e-commerce, Bernstein says

In August, Sea said it would focus on growth over profits — a reversal from recent cost-cutting measures in the face of economic uncertainty. Analysts said the pivot was a move to defend market share.

SeaMoney reported its first year of profit in 2023. The firm also expects its flagship game Free Fire “to grow double-digits year-on-year for both user base and bookings in 2024.”

“We are pleased to see positive trends in both growth and profitability for all three of our businesses. Looking ahead, we will continue to invest for the future with discipline and focus,” Sea said in a press statement on Monday.

“Guidance was quite positive and surprising,” said Sachin Mittal of DBS Bank. The bank upgraded Sea from “hold” to “buy” with a target price of $75 after the earnings report.

“It has got to do with TikTok being not so aggressive in Indonesia. They achieved what they wanted [with] Tokopedia and is now dealing with regulatory compliance,” Mittal told CNBC on Tuesday.

CGS-CIMB Securities analyst Khang Chuen Ong on Tuesday upgraded Sea to “add” from “hold” with a price target increase to $74 per share from $46, representing 37% upside.

Wedbush on Monday raised their target price for Sea to $72 from $45, maintaining an “outperform” rating.

“We are increasingly constructive on shares given the growth and margin trajectory implied by management’s outlook, and we believe Sea is in the early stages of a successful turnaround as competitive pressures ease and investments in live streaming, user acquisition, and fulfillment begin to bear fruit,” said Wedbush analysts.

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SEC sues Elon Musk, alleging failure to properly disclose Twitter ownership

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SEC sues Elon Musk, alleging failure to properly disclose Twitter ownership

Beata Zawrzel | Nurphoto | Getty Images

The SEC filed a lawsuit against Elon Musk on Tuesday, alleging the billionaire committed securities fraud in 2022 by failing to disclose his ownership in Twitter and buying shares at “artificially low prices.”

Musk, who is also CEO of Tesla and SpaceX, purchased Twitter for $44 billion, later changing the name of the social network to X. Prior to the acquisition he’d built up a position in the company of greater than 5%, which would’ve required disclosing his holding to the public.

According to the SEC complaint, filed in U.S. District Court in Washington, D.C., Musk withheld that material information, “allowing him to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due.”

The SEC had been investigating whether Musk, or anyone else working with him, committed securities fraud in 2022 as the Tesla CEO sold shares in his car company and shored up his stake in Twitter ahead of his leveraged buyout. Musk said in a post on X last month that the SEC issued a “settlement demand,” pressuring him to agree to a deal including a fine within 48 hours or “face charges on numerous counts” regarding the purchase of shares.

Musk’s lawyer, Alex Spiro, said in an emailed statement that the action is an admission by the SEC that “they cannot bring an actual case.” He added that Musk “has done nothing wrong” and called the suit a “sham” and the result of a “multi-year campaign of harassment,” culminating in a “single-count ticky tak complaint.”

Musk is just a week away from having a potentially influential role in government, as President-elect Donald Trump’s second term begins on Jan. 20. Musk, who was a major financial backer of Trump in the latter stages of the campaign, is poised to lead an advisory group that will focus in part on reducing regulations, including those that affect Musk’s various companies.

In July, Trump vowed to fire SEC chairman Gary Gensler. After Trump’s election victory, Gensler announced that he would be resigning from his post instead.

In a separate civil lawsuit concerning the Twitter deal, the Oklahoma Firefighters Pension and Retirement System sued Musk, accusing him of deliberately concealing his progressive investments in the social network and intent to buy the company. The pension fund’s attorneys argued that Musk, by failing to clearly disclose his investments, had influenced other shareholders’ decisions and put them at a disadvantage.

The SEC said that Musk crossed the 5% ownership threshold in March 2022 and would have been required to disclose his holdings by March 24.

“On April 4, 2022, eleven days after a report was due, Musk finally publicly disclosed his beneficial ownership in a report with the SEC, disclosing that he had acquired over nine percent of Twitter’s outstanding stock,” the complaint says. “That day, Twitter’s stock price increased more than 27% over its previous day’s closing price.”

The SEC alleges that Musk spent over $500 million purchasing more Twitter shares during the time between the required disclosure and the day of his actual filing. That enabled him to buy stock from the “unsuspecting public at artificially low prices,” the complaint says. He “underpaid” Twitter shareholders by over $150 million during that period, according to the SEC.

In the complaint, the SEC is seeking a jury trial and asks that Musk be forced to “pay disgorgement of his unjust enrichment” as well as a civil penalty.

This story is developing.

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Intel to spin off venture capital arm as chipmaker continues to restructure

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Intel to spin off venture capital arm as chipmaker continues to restructure

Dado Ruvic | Reuters

Intel said Tuesday that it plans to spin off Intel Capital, its venture capital wing, into an independent firm, the latest in a series of structural changes announced by the chipmaker.

Turning Intel Capital, which has $5 billion in assets, into a standalone fund will allow it to raise money from outside investors, Intel said. Until now, the venture arm has been fully funded by Intel.

Intel is coming off its worst year on the stock market since the company went public in 1971 due to a series of missteps and hefty market share losses. The company has been cutting costs and simplifying its business as it spends heavily to build cutting-edge chip factories while vying to reinvigorate its PC chip unit.

In December, Intel ousted Pat Gelsinger as CEO following a troubled four-year tenure. He’s been replaced by two interim co-CEOs, David Zinzner and Michelle Holthaus.

Intel sold or wound down a slew of smaller divisions in the past two years under Gelsinger, and laid off employees last year as part of a cost-cutting plan.

Intel is currently spinning off Altera, a company that specializes in simple chips called FPGAs, with plans for it to become a publicly traded company. It also owns the majority of Mobileye, an Israel-based maker of self-driving parts and software. Last year, Intel took several steps in the direction of turning its foundry business into an independent unit, including naming a board of directors.

In Tuesday’s announcement, the company said Intel Capital’s workforce would continue with the investment firm when it becomes independent in the second half of 2025. A representative declined to comment on specific executives’ plans. Intel Capital could also be renamed.

Intel Capital was established in 1991 and was unique at the time as a venture arm of a large corporation.

Since then, that model has been replicated across Silicon Valley and in other industries, with companies including Google, Microsoft, Salesforce, Unilever and BMW jumping into the business. Comcast, the owner of CNBC’s parent, NBCUniversal, started Comcast Ventures in 1999.

While Intel was early to corporate venture capital, it isn’t the first tech company to spin out its investment arm. In 2011, SAP turned SAP Ventures into an independent firm, later naming it Sapphire Ventures.

Corporate venture capital peaked in 2021, when firms in the space raised $156 billion and participated in close to 3,800 deals, according to the National Venture Capital Association. That was the same year that the broader VC market hit record levels, but startup investment numbers have since declined dramatically due largely to higher interest rates, which began going up in 2022.

WATCH: Intel plans to take its chip subsidiary Altera public

Intel plans to take its chip subsidiary Altera public

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Microsoft pauses hiring in U.S. consulting unit as part of cost-cutting plan, memo says

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Microsoft pauses hiring in U.S. consulting unit as part of cost-cutting plan, memo says

Executive Chair and CEO of Microsoft Corporation Satya Nadella speaks during the “Microsoft Build: AI Day” event in Jakarta, Indonesia, on April 30, 2024.

Ajeng Dinar Ulfiana | Reuters

Microsoft plans to pause hiring in part of its consulting business in the U.S., according to an internal memo, as the company continues seeking ways to reel in expenses. 

The announced cuts come a week after Microsoft said it would lay off some employees. Those cuts will affect less than 1% of the company’s workforce, according to one person familiar with Microsoft’s plans.

Although Microsoft indicated earlier this month that it plans to continue investing in its artificial intelligence efforts, cost cuts elsewhere could lead to gains for the company’s stock price. Microsoft shares increased 12% in 2024, compared with a 29% boost for the Nasdaq Composite index.

The changes by the U.S. consulting division are meant to align with a policy by the Microsoft Customer and Partner Solutions organization, which has about 60,000 employees, according to a page on Microsoft’s website. The changes are in place through the remainder of the 2025 fiscal year ending in June.

To reduce costs, Microsoft’s consulting division will hold off on hiring new employees and back-filling roles, consulting executive Derek Danois told employees in the memo. Careful management of costs is of utmost importance, Danois wrote. 

The memo also instructs employees to not expense travel for any internal meetings and use remote sessions instead. Additionally, executives will have to authorize trips to customers’ sites to ensure spending is being used on the right customers, Danois wrote.

Additionally, the group will cut its marketing and non-billable external resource spend by 35%, the memo says.

The consulting division has grown more slowly than Microsoft’s productivity software subscriptions and Azure cloud computing businesses. The consulting unit generated $1.9 billion in the September quarter, down about 1% from one year earlier, compared with 33% for Azure.

Under the leadership of CEO Satya Nadella, Microsoft in early 2023 laid off 10,000 employees and consolidated leases as the company contended with a broader shift in the market and economy. In January 2024, three months after completing the $75.4 billion Activision Blizzard acquisition, Microsoft’s gaming unit shed 1,900 jobs to reduce overlap.

A Microsoft spokesperson did not immediately have a comment.

WATCH: Microsoft plans to spend $80 billion to build out AI this year

Microsoft plans to spend $80 billion to build out AI this year

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