What happened Shares of Sea Limited (NYSE: SE) were trading down 5.9% at 11:41 a.m. EDT on Tuesday, following news that CEO Cathie Wood of ARK Invest had sold some shares on Monday. Wood's ARK Innovation ETF (NYSEMKT: ARKK) still held 654,161 shares of Sea Limited as of today, representing slightly over 1% of the fund's holdings. Image source: Getty Images. So what The stock has been on a tear over the last few years, as Sea's e-commerce and gaming businesses have expanded at a rapid pace. The company reported strong revenue growth of 65% in digital entertainment and 161% growth in e-commerce in the second quarter. The stock is up 58% year to date on top of more than a 2,000% gain over the last three years. Three different Wall Street analysts have upgraded the stock in the last few weeks, with a price target ranging from $380 to $400. However, the stock is expensive after its recent advance, trading at a high price-to-sales ratio of 23. Wood is likely seeing better opportunities elsewhere, as she also bought several other stocks on Monday, including Coinbase Global, Robinhood Markets, DraftKings, and Peloton Interactive. Now what Sea is quickly emerging as a leading global player in e-commerce and mobile gaming. In the second quarter, its Shopee app was the most downloaded on mobile app stores globally, and Free Fire continued to rank as the top-grossing mobile title, according to App Annie. Management raised its full-year guidance and now calls for e-commerce revenue to increase by 121.5% over 2020. Digital entertainment bookings are expected to grow 44% year over year. Still, investors should be cautious about paying a high valuation at this stage of the bull market, especially with the company recently choosing to issue additional shares to finance the growth of the business, which shows that even management is trying to take advantage of a frothy share price. 10 stocks we like better than Sea LimitedWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Sea Limited wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of September 17, 2021 John Ballard has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Peloton Interactive and Sea Limited. The Motley Fool has a disclosure policy.Source