At the height of trading, AMTD Digital saw its value increase by more than three times reaching over $450 billion in market capitalization.
Little known Hong Kong-based financial services company AMTD Digital has drawn media attention in recent days due to fluctuations in its stock prices.
The company's shares soared 126% this Tuesday, despite the fact that the entity only started its public offering for sale on the New York Stock Exchange in mid-July, CNBC reports. Although the initial price after the start of trading was $7.80 per share, two weeks later it shot up exorbitantly to 21,400%, reaching $1,679 on August 2, although throughout the day it to reach 2,555 dollars per unit.
At its peak, AMTD Digital, which offers loans and services to startups for a fee, saw its value increase more than threefold, reaching over $450 billion in market capitalization; that is, more than the parent company of Facebook, Meta qualified in Russia as an extremist organization, or the Chinese e-commerce giant Alibaba, according to Fortune magazine.
This Wednesday the shares of the company plummeted more than 34%, to stand at 1,100 dollars per unit, with a capitalization of more than 203,500 million, according to data from Yahoo.
Another example of meme actions
These drastic changes led some experts to believe that it was just another company with meme actions and a pump and dump scheme. Under this model, investors create artificial demand to drive the appreciation of certain companies' shares and then sell their own shares at a profit, driving prices down and inflicting losses on other investors.
It sure looks a lot like a pump and dump. It seems to have caught on with retail investors, who are often the fuel of these situations, financial analyst Nate Anderson told Reuters.
Meanwhile, from CNBC they pointed out that AMTD Digital's price is reminiscent of "the GameStop mania of 2021".
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