Meme stock traders have a new favorite: Hong Kong's AMTD Digital

AMTD IDEA

03/08/2022 13:44

By Bansari Mayur Kamdar and Medha Singh
    Aug 3 (Reuters) - Shares of AMTD Digital  HKD.N  on
Wednesday extended 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.
    AMTD's shares rose another 6% in premarket trading on
Wednesday. The company's market capitalization surged above $450
billion in a 244% jump on Tuesday, reminding investors of the
meme stock mania last year that drove record rallies in shares
of companies such as GameStop  GME.N  and AMC  AMC.N .
    The stock has soared about 21,000% since its July IPO, when
it listed at a price of $7.80.
    "It is clearly the newest meme stock with bands of retail
traders purchasing the stock at the same time, pushing the price
sharply higher," said Victoria Scholar, head of investment at
Interactive Investor.
    Scholar added that the bullish momentum was being
exacerbated by short covering to offset losses by hedge funds
with bearish positions on the stock.
    AMTD Digital was the most-mentioned stock on Reddit.com, the
social media platform central to the meme stock craze of 2021.
 urn:newsml:reuters.com:*:nL3N2NJ2PA
    The fintech company, 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.N .
    AMTD Idea's shares also surged 27.9% after closing Tuesday
with a market value of $2.6 billion.
    AMTD Digital said https://bit.ly/3Qd6FV9 on Tuesday 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.
    There has been a similar surge in some other recently listed
U.S. companies, including Getty Images  GETY.N  which jumped
over 200% since its debut on July 25.
    "There is no quantifiable reason for the behaviour, or
trajectory, as moves are sentiment driven, with these feelings
being based on little information," said Sophie Lund-Yates, lead
equity analyst at Hargreaves Lansdown.

 (Reporting by Bansari Mayur Kamdar and Medha Singh in
Bengaluru; Editing by Saumyadeb Chakrabarty)
 ((BansariMayur.Kamdar@thomsonreuters.com;))