August 13, 2022

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In a few weeks, a "small" company based in Hong Kong is ranked 25th on the list of the largest companies in the world: - something I've never seen before

In a few weeks, a “small” company based in Hong Kong is ranked 25th on the list of the largest companies in the world: – something I’ve never seen before

If AMTD Digital is unfamiliar to you, you are not alone.

According to its website, the Hong Kong-based company develops online solutions and boasts close collaboration with many of the “leading players in the financial industry.”

In mid-July, the company listed so-called “Depository Receipts” (ADR) on the New York Stock Exchange. These are stocks, the companies of which are listed outside the United States, which can be traded on an American stock exchange or market.

The listing consists of 16 million shares at $7.8 per share. The stock closed Tuesday night Norwegian time at $1,679, which means a totally insane price increase of more than 21,000 percent. Apparently there is no news at all since the listing.

This gives the company a market value of $310 billion, which ranks 25 Companiesmarketcap.com An overview of the world’s most valuable companies. Thus, AMTD Digital is valued more than, for example, Coca-Cola, Pfizer, Alibaba and a number of other giants.

Now there is speculation about whether AMTD Digital could be the new Gamestop.

$25 million in trading volume

In recent days, the stake has been hotly discussed in various Internet forums, including the “WallStreetBets” Reddit page.

As you know, this was one of the most important talking points about the pandemic when stocks like Gamestop and AMC were boosted into the draw, at the time, among other things, to inflict heavy losses on players who bet the share price would drop. The interest surrounding the shares led to sharp price hikes for both Gamestop and AMC, and the price hikes were more or less almost erased.

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This phenomenon may have become better known under the name “meme posts”.

“AMTD Digital is now among the 50 largest non-private companies in the world. It doesn’t do anything,” begins a post on Reddit Tuesday.

Others also question the company’s operations.

«[ …] Incorporated into the Cayman Islands. Not ‘fake’ at all,” writes another.

Among other things, it is indicated that the volume of the stake was low, which is supported by data from Bloomberg. Nordea investment manager Robert Ness also points out that the proportion of outstanding shares is low, which may contribute to a sharp price hike when demand is high.

It’s easy to say you should stay away from such things, and I mean it. But if you enter early, you can play and earn some money. But if you think about it now — it’s life-threatening, says Ness.

According to Bloomberg, AMTD Digital generated $25 million in sales last year.

Billions of potential profits for the organizers

It is not only the small savers who participated in the runaway rally early on who can make good money. The listing organizers, as part of the installation process, have the opportunity to purchase 2.4 million shares at the listing price of US$7.8 per share.

These shares can be sold freely in the market until August 15th. The facilitators were the firm’s brokerage firm AMTD Global Markets Limited, Livrmore Holdings Limited, Eddid Securities and Futures, and Eddid Securities USA.

They brought in $124.8 million, so the job is highly paid. A normal repayment of four per cent would have been $5 million. When the stock is trading for $1,679, that means a profit of $4 billion, says Ness.

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This corresponds to approximately 40 billion Norwegian kroner at today’s exchange rate.

– It was often seen in the ’90s and partly in 2020 that companies moved after the IPO, but that’s something I’ve never seen before.

Næss has no doubts that the rally is due to unbridled speculation, as well as a few stocks available.

Sounds like a new Gamestop or AMC, he says.

Thank you to the investors

The runaway price hike also means AMTD Idea Group, the parent company of AMTD Digital, moved more than 500 percent on the stock exchange on Tuesday.

The first and last stock experienced several trading stops in recent weeks due to the strong results.

On Tuesday, AMTD Digital issued a press release to thank investors.

In a press release, the company writes that it is grateful for the reception in the market, and says that, to its knowledge, there are no “other significant circumstances, events or factors” that could help explain the price hike.

“The company is closely monitoring the market for signs of ‘abnormal’ trading activity,” the letter said.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using the links that lead directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.