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What is AMTD Digital and why did its shares jump 32,000%?

Daily investors push shares of Hong Kong company AMTD 32,000% higher just two weeks after the IPO – is this Gamestop 2.0?

  • AMTD Digital made its market debut just two weeks ago
  • It was priced at $7.80 per share and the price jumped as high as $2,555
  • The company has said it does not know why the price has risen

Shares of a little-known tech company based in Hong Kong are up a staggering 32,000 percent since its IPO last month.

AMTD Digital made its stock market debut two months ago, reported revenue of $25 million last year and has just 51 employees.

At one point, it had a market value of $300 billion, comparable to Mastercard with annual sales of $25 billion, with a share price of $2,555.

Gamestop 2.0? AMTD Digital Shares Have Exploded Since IPO Sparking Speculation That Everyday Investors Are Driving The Price Up

What is AMTD Digital?

AMTD Digital is a Hong Kong-based investment company that is part of AMTD Idea Group, which is listed in New York and Singapore.

The company launched a ‘metaverse’ called AMTD SpiderNet in February and is mainly used by fintechs and online influencers. The idea is to collect fees and commissions from both sides.

AMTD Digital listed two weeks ago on the New York Stock Exchange, pricing its IPO at $7.80 per share and raising $125 million in revenue. Yesterday, the price jumped to $2,555 – it has since fallen to $1,300, still up 16,500 percent.

AMTD Idea Group has also benefited from interest in the company. It rose more than 520 percent on Tuesday, triggering trading halts as more and more investors poured into the stock.

Ben Laidler, eToro’s global market strategist, said: “AMTD Digital market cap of about $300 billion would make it a top 20 stock in the S&P 500, despite insignificant earnings.

By comparison, its market value is now comparable to that of Mastercard, the world’s second largest card payment processor, with annual sales of $25 billion. This won’t end well.’

Why has the share price exploded?

AMTD has not made any major announcements since its IPO to spark such an explosion in its share price. It has led some to suggest that it is just a continuation of the meme stock phenomenon, in which everyday investors drive the price up.

Laidler said: “Global IPO activity is down 50 percent this year from its all-time high in 2021 as the bear market has taken its toll.

But fintech AMTD Digital’s dramatic price rise since its recent IPO shows that speculative excesses are still alive in some corners of the market.

“Obviously there are a lot of investors hooked up to social media looking to take advantage of big momentum trading in relatively low volume stocks, similar to the well-documented 2021 cases with Gamestop and AMC.”

A cursory look at the Reddit thread Wall Street Bets, which sparked the Gamestop phenomenon, shows that there was no reference to AMTD prior to yesterday. So what else could be causing the stock price explosion?

Even AMTD is none the wiser. In a thank you note to its investors, the company said, to the best of its knowledge, “there have been no material circumstances, events or other matters relating to our company’s business and operational activities since the IPO date.”

It added that it was monitoring the market for “unusual trading activity or anomalies.”