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Saturday, Sep 07, 2024

AMTD Digital: How a small Hong Kong firm's shares soared

AMTD Digital: How a small Hong Kong firm's shares soared

A little-known Hong Kong company has seen its stock market value soar in recent days, for no apparent reason.

AMTD Digital made its New York debut last month, priced at $7.80 a share.

This week, the firm's shares have been on a rollercoaster ride, closing on Wednesday at $1,100.

The meteoric rise in AMTD Digital's value has seen it likened by some commentators to "meme stocks", shares that gain popularity among retail investors through social media.

Trading in the company's shares has been particularly volatile this week, as its value rose above $300bn on Tuesday.

That meant that AMTD Digital briefly overtook technology giant Alibaba's New York stock market valuation.

In Wednesday's trade it plunged by more than 30%, but that still gave it a higher US market value than Disney.

On Monday, AMTD Digital thanked investors and said it "noted significant volatility" in trading.

"The company is also monitoring the market closely for any unusual trading activities or abnormalities," the statement said.

AMTD Digital offers services to develop online businesses' financial services technology. It had 50 members of staff as of the end of February this year, according to a stock market filing.

It makes money mainly by charging fees and commissions for its digital financial services business, which brought in just over $25m in revenue last year, according to a regulatory filing.

A space-themed corporate video on the company's website highlights the range of digital services that the company offers.




The company's website describes it "as the fusion reactor at the core of the AMTD SpiderNet ecosystem, AMTD Digital is a one-stop digital solutions platforms in Asia with businesses spanning multiple verticals, including digital financial services, digital media, content & marketing, SpiderNet ecosystem solutions, and digital investments."

Some commentators have likened the rise in AMTD Digital's value to so-called "meme stocks". Due to the nature of their popularity, trading in meme stocks is often extremely speculative and volatile.

US retailer GamesStop and cinema chain AMC were two of the most high profile meme stocks that saw their shares soar last year.

"This is a major head-scratcher and it shows that the era of meme stocks is not over with a $300bn market cap," Dan Ives, managing director of Wedbush Securities told the BBC.

"In a major risk off market in 2022 it's bewildering this meme dynamic can still happen but yet it has and Wall Street is watching this latest craze," he added.

AMTD Digital did not immediately respond to a request for comment from the BBC.

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