Shares of AMTD Digital (HKD), a Hong Kong-based fintech company, jumped almost 130% on Tuesday amid a series of trading halts, with the stock surging yet again on Wednesday before crossing into negative territory. The AMTD Idea Group’s subsidiary went public last month and is up over 21,000% from its IPO price of $7.80. Despite some comparing the wild trading to GameStop’s (GME) in 2021 due to a surge of interest from Reddit-obsessed retail investors, Andrew Left’s Citron Research says AMTD Digital is “NOT a meme stock.” Although the “price is stupid,” Citron said, the stock “has not captured the imagination of retail traders like $GME.”
STOCK SOARED 21,000% SINCE IPO: AMTD Digital, a one-stop digital solutions platform in Asia and controlled subsidiary of AMTD Idea Group (AMTD), went public in mid-July at $7.80 per ADS. Since then, the stock has jumped over 21,000%, with some calling it the latest obsession of retail traders. Just this past week, the shares of AMTD Digital have spiked almost 300%, soaring 126% on Tuesday alone after a series of trading halts.
In a statement on Tuesday, the company "expressed its appreciation of support from the investor community for the successful completion of its initial public offering of 16,000,000 American depositary shares at a price of $7.80 per ADS.”
"The company's ADS trading in NYSE is still undergoing our initial stabilisation period whereby the underwriters have been granted a green-shoe option, exercisable within 30 days from the date of the final prospectus, to purchase up to an aggregate of 2,400,000 additional ADSs at the public offering price, less underwriting discounts and commissions. During the period since our initial public offering, the company noted significant volatility in our ADS price and, also observed some very active trading volume. To our knowledge, there are no material circumstances, events nor other matters relating to our company's business and operating activities since the IPO date. The company is also monitoring the market closely for any unusual trading activities or abnormalities, and would continue to maintain our communication channel wide-open to the public through our Investor Relations Office," AMTD Digital added.
‘NOT’ a meme stock: Commenting on the massive move, Andrew Left's Citron Research said via Twitter that, "$HKD is NOT a meme stock. While sure price is stupid, it only traded 339k shares yesterday. Has not captured the imagination of retail traders like $GME. Obviously, there is no borrow and if so has an egregious borrow fee. SEC does not regulate market caps. Have no position."
Meanwhile, in a series of tweets, Hindenburg Research’s Nate Anderson also turned the spotlight on AMTD Digital, saying that, “$HKD is a new IPO that just surged to a market cap of over $425 billion, despite having only ~$25m in annual revenue. The company is ~88.7% owned by AMTD, a sketchy Hong Kong-based underwriter we at @HindenburgRes have written about previously.”
“Every IPO we could find that was underwritten by $AMTD has collapsed. Its new issues have regularly been accused of serious fraud. In several instances, IPO proceeds were routed back to AMTD through suspicious bond deals. $AMTD has been repeatedly accused of serious fraud domestically in Hong Kong. As is all-too-common, the firm has found a welcome home in the U.S. where it continues to list absolute trash on our "premier" exchanges. $HKD and $AMTD are now spiking in what is surely a mega squeeze. We have no position in either and have just been watching the madness from the sidelines. However, we find it deeply troubling that serial facilitators of fraud can disrupt our markets completely unabated.”
At time of publication, AMTD Digital hadn’t responded to The Fly’s requests for comment.
PRICE ACTION: In Wednesday morning trading, shares of AMTD Digital have dropped about 41% to $990.
