{"id":1592707,"date":"2022-08-07T07:01:32","date_gmt":"2022-08-07T11:01:32","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1592707"},"modified":"2022-08-07T07:02:04","modified_gmt":"2022-08-07T11:02:04","slug":"stock-nobody-has-ever-heard-of-surges-32000-then-loses-175-billion-in-value","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/stock-nobody-has-ever-heard-of-surges-32000-then-loses-175-billion-in-value\/","title":{"rendered":"Stock Nobody Has Ever Heard of Surges 32,000% Then Loses $175 Billion in Value"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fstock-nobody-has-ever-heard-of-surges-32000-then-loses-175-billion-in-value%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1592707&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><\/div>\n<p>(Bloomberg) &#8212; Even after a retail frenzy that saw GameStop Corp. become the hottest stock in the world and a dog-themed joke cryptocurrency gain billions in value, the whirlwind trading in an obscure Hong Kong financial business stands out as spectacular.<\/p>\n<p>Most Read from Bloomberg<\/p>\n<p>The rapid rise of AMTD Digital Inc. &#8212; a barely profitable financial services firm &#8212; is a tale that, while reminiscent of last year\u2019s meme-stock frenzy, is even more mysterious. In a move that has puzzled the financial community, the company\u2019s shares skyrocketed in less than three weeks from their $7.80 initial public offering price to an intraday high of $2,555, an eye-popping jump of more than 32,000%.<\/p>\n<p>Perhaps even more perplexing, unlike other publicly traded financial juggernauts that report hundreds of billions of dollars in revenue each year, AMTD\u2019s IPO prospectus lists total sales of just $25 million for the year ended April 2021. Still, that didn\u2019t stop the company\u2019s market value from ballooning to $310 billion at Tuesday\u2019s close, making it larger than industry stalwarts like Goldman Sachs Group Inc. and Bank of America Corp.<\/p>\n<p>\u201cI\u2019m not entirely sure what the business model there is, but that hasn\u2019t mattered to the Reddit crowd who are dipping in like piranhas,\u201d said Max Gokhman, chief investment officer at money manager AlphaTrAI Inc.<\/p>\n<p>Much like the retail-induced mania of early 2021, which catapulted stocks like GameStop and AMC Entertainment Holdings Inc. to baffling highs before they plunged just as quickly, AMTD\u2019s run as a financial giant seems likely to be short-lived. Since hitting a record on Tuesday, ATMD Digital has fallen by 57%, erasing about $175 billion in market value along the way. That\u2019s more than the entire current market capitalization of companies including Morgan Stanley, Intel Corp., and Goldman Sachs.<\/p>\n<p>Still, it\u2019s hard to pin the stock\u2019s wild moves entirely on the retail crowd. While AMTD Digital appeared high on Fidelity\u2019s list of most actively traded stocks multiple times during the week, it lacks a few key characteristics.<\/p>\n<p>For starters, AMTD Digital doesn\u2019t yet have any options available to be traded. Frenzied buying of call options was a hallmark of the GameStop and AMC stock surges. Trading volumes, meanwhile, have also been extremely low for a majority of the past week\u2019s moves. Despite seeing swings of at least 40% in either direction on all but one day this week, the stock has yet to crack 500,000 shares traded on a single day. On Friday, just over 50,000 shares changed hands, its sixth straight session of declining volume.<\/p>\n<p>As for the retail traders themselves, even a cursory search of the top posts on Reddit\u2019s WallStreetBets forum shows a flood of denials of any involvement.<\/p>\n<p>AMTD Family<\/p>\n<p>AMTD Digital\u2019s frenetic moves also led to extreme volatility in the shares of one of its parent companies, AMTD Idea Group. That firm, which is part of the larger AMTD Group umbrella, owns roughly 88.7% of AMTD Digital\u2019s outstanding shares. It too saw a wave of buying this week, soaring as much as 520% on Tuesday alone.<\/p>\n<p>On Friday, AMTD Digital announced that the underwriters of its mid-July IPO had decided to exercise their full greenshoe option. That means they\u2019ll be able to purchase an additional 2.4 million American depositary shares at their listing price of $7.80 each, roughly 99% below where they closed on Friday.<\/p>\n<p>AMTD Global Markets Ltd. was the lead underwriter on AMTD Digital\u2019s IPO, responsible for nearly 90% of the shares, meaning it could potentially profit off its involvement.<\/p>\n<p>That\u2019s all shone a spotlight on Calvin Choi, AMTD Group\u2019s chairman, chief executive officer and major shareholder, who\u2019s currently facing an industry ban in Hong Kong for failing to disclose conflicts of interest when he worked at UBS Group AG.<\/p>\n<p>Already some firms are cutting ties. Billionaire Li Ka-shing\u2019s CK Group said Thursday that it would sell its remaining stake in parent company AMTD Group Co.<\/p>\n<p>Growing Pattern<\/p>\n<p>As shocking as the post-IPO surge for AMTD Digital has been, it\u2019s far from alone in such moves. On Friday, another Hong Kong-based financial firm Magic Empire Global Ltd. made its US trading debut only to see its shares halted for volatility multiple times as it surged as much as 5,799%.<\/p>\n<p>Other Hong Kong and Chinese stocks have seen similarly outsized gains after debuting in the US in recent weeks. At least five other companies, including Ostin Technology Group Co., Golden Sun Education Group Ltd. and Intelligent Living Application Group Inc. have posted intraday gains of 395% or more on their first day of trading.<\/p>\n<p>Michael Burry, the investor who famously predicted the housing crash in 2008, tweeted a screenshot of Magic Empire\u2019s stock chart Friday and said, \u201cGamblers gamble more the more they lose.\u201d<\/p>\n<p>(Updates with additional context on AMTD, prices throughout)<\/p>\n<p>Most Read from Bloomberg Businessweek<\/p>\n<p>\u00a92022 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Bloomberg) &#8212; Even after a retail frenzy that saw GameStop Corp. become the hottest stock in the world and a dog-themed joke cryptocurrency gain billions in value, the whirlwind trading<\/p>\n","protected":false},"author":1,"featured_media":1592762,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1592707","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1592707","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1592707"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1592707\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1592762"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1592707"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1592707"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1592707"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}