Shares of Hong Kong-based fintech AMTD Digital extended their sensational rise on Wednesday in a rally continuing to be fuelled by retail investors.
This week AMTD’s market value briefly surpassed that of Facebook-owner Meta Platforms after it rose another 6% in premarket trading on Wednesday.
The company’s market capitalisation 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 and AMC.
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.
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.
Parent Company AMTD Idea Boosted Too
AMTD Idea’s shares also surged 27.9% after closing Tuesday with a market value of $2.6 billion.
AMTD Digital said 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 US companies, including Getty Images 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.
- Reuters with additional editing by Sean O’Meara