The $300 billion meme stock that makes GameStop look like a piece of cake
The Reddit logo is seen on a smartphone in front of a displayed Wall Street Bets logo in this illustration taken on January 28, 2021.
Dado Ruvic | Reuters
Think the meme stock craze is so 2021? Just take a look at AMTD Digital.
The little-known Hong Kong-based fintech company saw its shares rise by 126% on Tuesday alone after experiencing a series of trading halts. AMTD Digital, a subsidiary of investment holding company AMTD Idea Group, went public in mid-July with its American depositary receipts traded on the NYSE. Two weeks later, the stock is up 21,400% to $1,679 apiece from its IPO of $7.80.
The monstrous move pushed its market capitalization to over $310 billion as of Tuesday, making it bigger than Coca-Cola and Bank of America, according to FactSet. AMTD Digital generates revenue primarily from fees and commissions from its digital financial services business, and it earned just $25 million in revenue in 2021, according to a regulatory filing.
The wild trade is reminiscent of the GameStop mania of 2021, where a group of Reddit-obsessed retail investors managed to push up the video game retailer’s stock and squeeze out short-selling hedge funds. In fact, the ticker HKD became the most popular mention on Reddit’s WallStreetBets chat room on Tuesday, according to alternative data provider Quiver Quantitative.
AMTD Idea Group’s ADR was also the most actively traded stock on the Fidelity platform on Tuesday. The stock has fallen almost 300% this week.
The intense speculative behavior among private investors is once again making many on Wall Street nervous.
“As we’ve learned over the last two years, events like this cause what I would say are opportunities for profit but great risk of loss, especially for our retail investors,” Jay Clayton, former SEC chairman, said Wednesday on CNBC’s “Squawk Box “. .”
Famed short seller Jim Chanos took to Twitter and expressed frustration with the craze.
“So we’re all just going to ignore the $400 billion meme store in space?” Chanos said in a tweet. “We literally had congressional hearings over the $30B runs of $GME and $AMC, but only [crickets] Today.
The crazy moves, based on no material news, also shocked the company itself. AMTD Digital issued a “thank you” note to investors on Tuesday, adding that it is closely monitoring the market for any trading anomalies.
“To the best of our knowledge, there are no material circumstances, events or other matters related to the company’s business and operating activities since the IPO date,” AMTD Digital said in the statement.
