August 10, 2022
Meme stock AMTD slips 34% after eye-popping surge

Shares of AMTD Digital tumbled 34% on Wednesday to snap an eye-catching rally this week by retail investors that took the Hong Kong-based fintech’s market cap past that of Facebook-owned Meta Platform.

The company’s market capitalization closed above $300 billion in a 128% jump on Tuesday, reminding investors of the meme stock frenzy last year that shares of companies like Gamestop and AMC saw record rallies.

The stock has risen nearly 21,000% since its July IPO, when it listed at a price of $7.80. On Wednesday it closed at $1,100.

“It certainly looks like a pump-and-dump,” said Hindenburg Research founder Nate Anderson, adding that it doesn’t have a position at AMTD Digital. “It seems to have caught on among retail investors, which is often the fuel for these situations.”

In a typical pump-and-dump scheme, investors create artificial demand to boost companies’ stock prices and then sell their own shares at a profit, causing the price to drop, causing a loss to other investors. Is.

amtd digital sign
AMTD Digital’s stock is up nearly 21,000% since its July IPO.
amtd digital

AMTD Digital was the most mentioned stock on Reddit.com, the social media platform that was at the center of the 2021 meme stock craze.

The company on Tuesday said that since the date of the IPO there has been no material change or event related to the company’s business and operating activities and it is monitoring the volatility of the stock.

The fintech firm, which provides loans and services to startups in exchange for fees, has a low float and is tightly controlled by parent company AMTD Idea.

Shares of AMTD Idea also fell 11% after Tuesday’s close with a market cap of $2.6 billion.

“(AMTD Digital) is clearly the latest meme stock, with bands of retail traders buying the stock at the same time, driving the price up sharply,” said Victoria Schaller, Head of Investments at Interactive Investor.

A few other recently listed US companies have seen a similar, but smaller, increase, including Getty Images, which has jumped more than 200% since its July 25 launch.

“Should this market rebound have more legs, we expect retail investors’ appetite for speculative stocks to continue as they look for opportunities to further reduce losses accumulated during the year,” said data science analyst Lucas Mantel. Huh.” Wanda Research.

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