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Meme stock AMTD slides 34% after eye-popping surge


Shares of AMTD Digital plunged 34% on Wednesday to snap an eye-popping rally fueled by retail investors this week that briefly took the Hong Kong-based fintech’s market value past that of Facebook-owner Meta Platforms.

The corporate’s market capitalization closed above $300 billion in a 128% jump on Tuesday, reminding investors of the meme stock mania last yr that drove record rallies in shares of firms comparable to GameStop and AMC.

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

“It sure looks rather a lot like a pump-and-dump,” Nate Anderson, founding father of Hindenburg Research, said, adding that it doesn’t have a position in AMTD Digital. “It seems to have caught on amongst retail investors, which is commonly the fuel for these situations.”

In a typical pump-and-dump scheme, investors create artificial demand to spice up firms’ stock prices after which sell their very own shares at a profit causing prices to fall, saddling others investors with losses.

AMTD Digital’s stock has risen about 21,000% since its July IPO.AMTD Digital

AMTD Digital was also the most-mentioned stock on Reddit.com, the social media platform central to the meme stock craze of 2021. 

The corporate said on Tuesday there was no material change or event related to the corporate’s business and operating activities for the reason that IPO date and that it was monitoring the share volatility.

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.

AMTD Idea’s shares also slid 11% after closing Tuesday with a market value of $2.6 billion.

“(AMTD Digital) is clearly the latest meme stock with bands of retail traders purchasing the stock at the identical time, pushing the value sharply higher,” said Victoria Scholar, head of investment at Interactive Investor.

There was an analogous, but smaller, surge in another recently listed US firms, including Getty Images which jumped over 200% since its debut on July 25.

“Should this market rebound have more legs, we expect retail investors’ appetite for speculative stocks to proceed, as they seek the chance to further scratch back the losses they’ve accrued through the yr,” said Lucas Mantle, an information science analyst at Vanda Research.

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