Shares of a little-known fintech company based in Hong Kong plunged 30 percent on Wednesday to close at $1,100 after a colossal rally since its July IPO which made it bigger than Alibaba, Toyota Motors, Coca-Cola, and Bank of America.
AMTD Digital has surged 21,000 percent since its IPO over two weeks ago when it listed at $7.80, defying gravity at a time when investors and policymakers around the world are discussing and debating recession, war, inflation, and the next black swan.
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AMTD Digital, which went public in New York on July 15, saw its market cap surge past $300 billion on August 2 before crashing to $203 billion yesterday.
The interesting part is that AMTD Digital, which primarily provides loans and services to startups in exchange for fees, has generated only $25 million in revenue for the year ended April 2021, according to a regulatory filing.
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The stock is currently trading at nearly 6,000 times its earnings per share.
Reacting to the stock surge, the company issued a “thank you note” to investors on August 2, clarifying that there was no material change or event related to the company's business and operating activities since the IPO date and that it was monitoring the share volatility.
The monstrous stock move is reminiscent of the 2021 meme stock mania which drove record rallies in shares of companies such as GameStop and AMC.
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