Think the meme stock mania is over? A little-known fintech stock just proved you wrong. AMTD Digital, a Hong Kong-based fintech company that went public in July, saw its stock skyrocket more than 200-fold in less than three weeks, baffling investors as well as the company itself.
What is AMTD Digital?
AMTD Digital was founded in 2019 as a subsidiary of AMTD Idea Group, a Hong Kong-based investment holding company with shares traded on the New York Stock Exchange (NYSE) under the ticker “AMTD.”
AMTD Digital went public on July 15 on the NYSE under the ticker “HKD” at an IPO price of $7.80. By August 2, its share price had skyrocketed to $2,555 a share, valuing the company at $310 billion, more than Bank of America and Alibaba.
AMTD Digital provides “one-stop, cross-market” digital financial services for retail and corporate clients in Asia, according to its website. Its services include insurance, portfolio management, digital media marketing and a platform connecting clients. Last year, the company generated $25 million in revenue and $22 million in net profit, according to its IPO filing.
Bizarre stock surge has no obvious explanation
AMTD Digital’s stock jumped nearly 250 percent on August 2. Shares of its parent company soared more than 300 percent. It’s unclear what triggered the monstrous rally. In a “thank you note” to investors, AMTD Digital said, “there are no material circumstances, events nor other matters relating to our company’s business and operating activities since the IPO date,” adding it’s monitoring the market closely for any unusual trading activities.
On Reddit’s WallStreetBets forum, where retail investors discuss stock and option trading, a thread discussing AMTD Digital’s sudden surge received more than 3,600 upvotes and more than 600 comments.
“This is a casino. Fundamentals have meant jackshit since 2008,” a Reddit user wrote.
“It seems like such and obvious pump and dump, how do they intend to prevent people from betting on the inevitable downturn next week?” Another user commented.
The dumping apparently started on August 3 after AMTD Digital made news headlines. Shares dived 42 percent on August 3 and plummeted another 20 percent this morning (August 4).