The Reddit logo is seen on a smartphone in front of a Wall Street Bets logo shown in this Jan. 28, 2021, file photo.
Donat Ruvic | Reuters
Think the meme stock craze is so 2021? Just check out AMTD Digital.
The little-known Hong Kong-based fintech firm saw its shares soar 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 the listing of its American depositary receipts on the NYSE. Two weeks later, the shares are up 21,400% to $1,679 each from their IPO price of $7.80.
The monster move boosted its market capitalization above $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 earned just $25 million in 2021, according to a regulatory filing.
Zoom in on the Arrows icon pointing outwards
The wild trade is reminiscent of the GameStop craze of 2021, where a gang of Reddit-obsessed retail investors managed to push the video game retailer’s stock higher and short-sell hedge funds. In fact, the HKD ticker became the most popular mention in Reddit’s WallStreetBets chat room on Tuesday, according to alternative data provider Quiver Quantitative.
AMTD Idea Group ADR was also the most actively traded stock on the Fidelity platform on Tuesday. Shares are up nearly 300% this week.
Intense speculative behavior among retail investors is once again unsettling many on Wall Street.
“As we’ve learned over the past couple of years, events like this lead to what I would say are opportunities for profit, but a great risk of loss, especially for our retail investors,” said Jay Clayton, former chairman of the SEC, in CNBC’s “Squawk Box.” Wednesday.
Famous short seller Jim Chanos took to Twitter and expressed frustration with the craze.
“So we’re all going to ignore the $400 million meme stock in the room?” Chanos said in a tweet. “We literally had congressional hearings on the $30 million of $GME and $AMC, but only [crickets] today.
The crazy moves, based on no material news, also surprised 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 our knowledge, there are no material circumstances, events or other matters related to the business and operating activities of our company since the date of the IPO,” the company said in the statement.