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

Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York, U.S., August 2, 2022. REUTERS/Andrew Kelly

Aug 3 (Reuters) – Shares in AMTD Digital on Wednesday extended an impressive rally fueled by retail investors this week, which briefly pushed the Hong Kong-based fintech’s market value past that of its Meta Platforms owner of Facebook.

AMTD shares rose another 6% in premarket trading on Wednesday. The company’s market capitalization topped $450 billion in a 244 percent jump on Tuesday, reminding investors of the meme stock frenzy last year that led to 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 $7.80.

“It’s clearly the latest meme stock with groups of retail traders buying the stock at the same time, pushing the price sharply higher,” said Victoria Scholar, chief investment officer at Interactive Investor.

Scholar added that the bullish momentum was exacerbated by short-term loss-setting hedge funds shorting the stock.

AMTD Digital was the most talked about stock on Reddit.com, the social media platform central to the meme stock craze of 2021. Read more

The fintech firm, which provides loans and services to startups for a fee, is thinly traded and tightly controlled by parent AMTD Idea ( AMTD.N ).

Shares of AMTD Idea also rose 27.9% after Tuesday’s close with a market value of $2.6 billion.

AMTD Digital he said on Tuesday there has been no significant change or event related to the company’s business and operating activities since the date of the IPO and that it was monitoring the stock’s volatility.

There was a similar rise in some other recent US IPOs, including Getty Images which jumped more than 200% since its July 25 debut.

“There is no quantifiable reason for the behavior or trajectory, as moves are driven by emotion, with those emotions based on little information,” said Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown.

Reporting by Bansari Mayur Kamdar and Medha Singh in Bengaluru. Edited by Saumyadeb Chakrabarty

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