Fintech startup AMTD Digital becomes the new GameStop • The Register
The share price of an obscure Asian financial services startup has exploded, apparently after social media users decided to pile into the stock.
The company is called AMTD Digital, which claims to possess a “comprehensive digital solutions platform equipped with multi-sector scarce digital financial licenses in Asia.”
Listed on the New York Stock Exchange on July 15, the company was pleased that its shares were selling at $7.80 apiece for a value that topped $1 billion — fine numbers for a young company with HK$195 million ($25 million) in annual revenue.
On Tuesday, the share price reached $2,555.30. No, it’s not a typo: the shares went from $7.80 to two thousand five hundred and fifty five US dollars apiece in three months.
The company has issued a statement about the extraordinary increase, in which it says:
That’s finance-speak for: “Nothing has changed that would suggest any reason for our stock price to go wrong.”
The reason for the peak is uncertain. Suspicion has fallen on the same kind of social media-driven retail investors who saw prices rise for so-called “meme stocks” like GameStop and AMC.
Others have alleged that the stock has been manipulated by unknown parties – perhaps to use AMTD Digital’s Hong Kong home to play on the territory’s dollar, which has also risen.
Whatever the reason for the price hike, it has caused problems for CK Hutchison, the Hong-Kong-based conglomerate that operates the “3” mobile phone brand in several nations and has other technical interests as well.
In the early 2000s, CK Hutchison helped finance the formation of AMTD Digital’s parent company.
Hutchison today issued a statement pointing out that it has a 4 percent stake in AMTD Group, AMTD Digital’s parent, but “is not involved in its operations and has no knowledge of any of its businesses or plans.”
The company later updated the statement with news that it “has entered into negotiations for the sale of its remaining shares in AMTD Group.”
The same can be said for some of the investors in AMTD Digital, who have now seen the share price drop to just $1,100 – still a huge premium compared to $7.80. Reddit’s wallstreetbets subreddit — which was credited with driving the rise of stocks like GameStop — currently features some tales of grief from investors who bought in while AMTD Digital’s stock was still rising, and many theories suggesting manipulation of the company’s stock and/or or unfair media coverage that unfairly blames the forum for the odd price movements. ®
