The “Meme stock” craze seems to be back, after the phenomenon that held the bench in 2021 with the story of Game Stop, thanks to the performances of AMTD Digital. Until a few months ago, the name of the Asian fintech company meant little. In a few weeks since its listing, AMTD Digital has gained more and more visibility (the most recent news is that in recent days it has seen its shares rise in the 126%).
AMTD Digital is a subsidiary of the investment holding AMTD Idea Group. The Singapore-based fintech debuted in New York on July 15, 2022, and within two weeks it had a tremendous run, bringing capitalization above the 310 billion dollars touched right in the session on Tuesday. This is a larger market cap than giants globally, including Walmart, Procter & Gamble, JP Morgan, Coca Cola and Bank of America according to FactSet.
AMTD Digital generates revenue primarily from commissions related to its digital financial services businesses and for 2021 it has only realized 25 million dollars in revenue, according to a regulatory filing.
In the chart the price of the AMTD Digital stock after the close of the last US session, as we can see the stock has suffered a 34% drop compared to its record value recorded on Tuesday.
AMTD, who is the new star of the Reddit world?
AMTD Digital is a unique digital solutions platform in Asia with companies spanning multiple industries, including digital financial services, digital media, content and marketing, SpiderNet ecosystem solutions, and digital investments. AMTD Digital provides loans and services to startups in exchange for commissions. The company generated just $ 25 million in revenue for the year ending April 2021.
Fintech is a subsidiary of the parent company of AMTD Idea Group, a Chinese financial company headquartered in Hong Kong.
It is interesting to note that, at its peak on Tuesday, the market capitalization of AMTD Digital was more than double that of Adobe, Walt Disney, Accenture, McDonald’s, Cisco, Nike, Verizon and many others. Briefly joining the club of the 13 most capitalized companies.
The reaction of the analysts
Out of control trading inevitably brings to mind the recent ‘GameStop mania’ in which a group of small investors operating on Reddit managed to push the game retailer’s stock up and squeeze more “short” hedge funds. Indeed, the ticker HKD AMTD became the most popular mention in Reddit’s WallStreetBets chat room on Tuesday, according to data provider Quiver Quantitative.
“As we have learned over the past two years, events like this cause what I would say are opportunities for profit but a great risk of loss, particularly for our small investors” he warned Jay Claytonformer SEC chairman, in an interview for CNBC.
The famous short seller Jim Chanos he replied to Clayton on Twitter expressing his frustration.
“So are we all going to ignore the $ 400 billion stock meme in the room? ” Chanos tweeted.
The insane trading, based on no fundamentals news, also took the same company by surprise that on Tuesday AMD Digital released a note in which it thanked investors, adding that it is closely monitoring the market for any trading anomalies. “To our knowledge, there are no material circumstances, events or other matters relating to the business and operations of our company since the date of the IPO”, AMDD Digital said in the statement.