The wild swings in the stock price of a largely unknown Hong Kong-based fintech company in recent days have reminded some analysts and traders of the “meme stock” craze that has grabbed headlines and fueled controversy early last year.
On Tuesday, the share price of online financial services firm AMTD Digital was more than 21,000% higher than its IPO price last month.
The price has fallen in recent days to end the week well below the previous high, but even so, as of Friday’s market close, the stock price stood at $721, representing a 127% jump. for the week and a 9,143% increase since its IPO. The stock debuted on the New York Stock Exchange on July 15 at $7.80 per share.
At the peak of AMD Digital’s stock rally on Tuesday, the company hit a valuation of $310 billion, making it bigger than Coca-Cola and Bank of America, according to FactSet. The nearly 3-year-old company brought in just $25 million in revenue last year, according to a regulatory filing.
The dramatic rise in the company’s stock price is due to a targeted surge in online retail similar to that which sent shares of companies like GameStop and AMC soaring early last year, Dan said. Ives, an equity analyst at Wedbush Securities, told ABC News.
Some observers, however, questioned AMTD Digital’s designation as a meme store.
The phenomenon of a stock meme trade describes a pattern in which retail investors see stocks rise sharply as others back a company, then others jump into the fray, pushing the stock price even higher and attracting another wave of investors. A surge of such trades last year prompted a congressional hearing and investigation.
AMTD Digital did not respond to a request for comment. But a statement released by the company on Tuesday expressed gratitude to investors for their support, while acknowledging that the stock “is still undergoing an initial stabilization period.”
“During the period since our IPO, the company has seen significant volatility in the price of our ADSs and has also seen very active trading volume,” AMTD Digital said.
“To our knowledge, there have been no significant circumstances, events or other matters relating to the business and operational activities of our company since the date of the IPO,” the company added.
Citron Research, an equity research firm, chastised AMTD Digital’s designation as a stock meme, citing the fintech company’s relatively low stock trading volume compared to the year’s rise. latest from GameStop, which trades under the symbol GME.
“$HKD is NOT a meme stock”, Citron Research tweeted on Wednesday, referring to AMTD Digital by its ticker symbol HKD. “Hasn’t captured the imagination of retail traders like $GME.”
Citron Research said in the tweet that 339,000 shares of AMTD Digital traded on Tuesday.
Nearly 900,000 individual accounts traded GameStop stock each day during the height of the trading frenzy last January, a dramatic increase from less than 10,000 accounts each day earlier that month, according to a survey by the Securities and Exchange Commission.
Still, the volatility in AMD Digital’s price has renewed a debate among some about meme stock trading.
“So we’re all going to ignore the $400 billion meme stockpile in the room?” prominent short seller Jim Chanos tweeted from AMDD Digital on Tuesday. “We literally had congressional hearings on $30 billion from $GME and $AMC, but just [crickets] today.”
Wedbush’s Ives said AMTD Digital’s volatility in recent days shows that the emergence of a meme stockpile remains possible, even if it has become less common.
“It’s more the rarity than the norm,” he said. “Most of that is in the rearview mirror.”
“But the situation has brought to light that the era of memes still has oxygen,” he added.