India abruptly banned Sea Ltd.'s most popular mobile gaming title - Garena Free Fire, causing its market value to drop by more than $16 billion in its biggest ever daily drop. Investors are growing concerned that this ban may be just the beginning of the company's troubles.

Shares of Sea Ltd (SE:NYSE), listed on the New York Stock Exchange, fell by 18.56% following the sudden ban of the battle royale game in India. The company is already struggling after its shares have fallen by 60% since November 2020.

During the day of the ban, the opening price per share on 14 February, 2022, was $139, declining further to $128.76, the lowest of the day.

With its potential to expand its gaming, e-commerce, and financial services offerings beyond Singapore, Sea went public in 2017 and quickly became the most valuable company in Southeast Asia.

The publisher of Free Fire is Garena, and the parent company is Sea Limited. Both companies are based in Singapore, which is all the more reason why many players disagree with the ban.Free Fire's unexpected ban from the Indian government on 14 February 2022 caught everyone by surprise, affecting shares of Garena's parent company Sea Limited in the U.S. as well.

Garena's flagship title was removed from the Apple App Store and the Google Play Store on 12 February, 2022, which led to initial ban requests. Around 40 million of Free Fire's 75 million users played the battle royale game in India.

The ban of Free Fire in New Delhi reveals Sea's uphill struggle amid geopolitical tensions and increasing competition from rivals like Alibaba Group Holding Ltd. 's Lazada. The company has yet to confirm whether it will unban  the game in the future.

The Free Fire ban, according to CGS-CIMB analysts Ong Khang Chuen and Kenneth Tan, might  present a "buying opportunity.” Garena has around ten percent of its monthly active users in India, which could trigger a knee-jerk reaction in the stock price of Sea as a result of the ban.However, against the micro backdrop they lowered their target price for Sea from $425 to $288.