An obscure Asian financial services startup’s share price has exploded, seemingly after social media users decided to pile into the stock.
The company is called AMTD Digital, which claims to have in its possession a “comprehensive digital solutions platform equipped with multi-sector scarce digital financial licenses in Asia.”
The business listed on the New York Stock Exchange on July 15 and was pleased that its shares sold at $7.80 apiece at a valuation that topped $1 billion – nice numbers for a young company with HK$195 million ($25 million) annual revenue.
On Tuesday the share price reached $2,555.30. But that’s not a typo: shares went from $7.80 to two thousand five hundred and fifty-five United States dollars apiece within three months.
The company has issued a statement about that extraordinary increase, in which it states:
That’s finance-speak for: “Nothing has changed that would suggest any reason for our share price going bonkers.”
The reason for the spike is uncertain. Suspicion has fallen on the same kind of social media-fueled retail investor pile-on that saw prices spike for so-called “meme stocks” like GameStop and AMC.
Others have alleged that the stock has been manipulated by parties unknown – perhaps to use AMTD Digital’s Hong Kong home to make a play on the territory’s dollar, which has also risen.
Whatever the reason for the share price surge, it has caused hassles at CK Hutchison, the Hong-Kong based conglomerate that operates the mobile phone brand “3” in several nations and has other tech interests besides.
In the early 2000s, CK Hutchison had a hand in funding the formation of AMTD Digital’s parent company.
Hutchison today issued a statement pointing out that it has a 4 percent stake in AMTD Group, AMTD Digital’s parent, but “is not involved in its operations and has no knowledge about any of its businesses or plans.”
The company later updated the statement with news that it “has entered into negotiations on the sale of its remaining shares in AMTD Group.”
The same could be said for some of the investors in AMTD Digital, who have now seen the share price slump to just $1,100 – still a huge premium compared to its $7.80 float. Reddit’s wallstreetbets subreddit – which was held to be the reason for the rise of stocks like GameStop – currently features some tales of woe from investors who bought in while AMTD Digital’s stock was still rising, and plenty of theories suggesting manipulation of the company’s shares and/ or unfair media coverage unfairly blaming the forum for the odd price movements. ®