AMTD Digital, Parent Plunge in Wake of Baffling 32,000% Rally

(Bloomberg) -- The massive rally in two little-known Hong Kong-based financial services firms is ending just as quickly as it began. .Financial services provider AMTD Idea Group dropped 31% Thursday, following a blistering surge that left market watchers baffled, while its subsidiary AMTD Digital Inc. fell 27%..At its height, AMTD Digital — which develops digital businesses, including financial services — had a larger market value than Bank of America Corp. and Goldman Sachs Group Inc., rallying more than 32,000% from its initial public offering last month. That’s despite posting only $25 million in revenue for the year ended April 2021. .Even with double-digit declines on Wednesday and Thursday, AMTD Digital is still up more than 10,000% from its IPO price..The reasons for the surge are still unclear, although some have suggested the stock’s tiny public float. The bulk of AMTD Digital’s increase in market value came from its Class B shares, which aren’t publicly traded. .Reddit community WallStreetBets, which was one of the main drivers of the meme-stock mania that pushed companies like GameStop Corp. and AMC Entertainment Holdings Inc. to astronomical highs last year, has refuted claims that it’s involved. Still, some retail traders have doubtlessly jumped on the move, with AMTD Idea Group topping Fidelity’s list of most-bought stocks on Tuesday. It’s currently in 24th place. .Hong Kong billionaire Li Ka-shing’s CK Group said Thursday that it would sell its remaining stake in parent company AMTD Group Co. The move comes amid heightened scrutiny of Calvin Choi, AMTD Group’s chairman, chief executive officer and major shareholder, who is battling an industry ban in Hong Kong for not disclosing conflicts of interest. .Li’s ties to the stocks have become a topic of discussion on Chinese social media in recent days. Posts viewed by Bloomberg News on the popular Chinese messaging app WeChat linked to videos of Li with text overlayed that touted his ties to AMTD Group. Local media reports also mentioned his links to the little-known firm..(Updates with closing stock moves throughout.).More stories like this are available on bloomberg.com.©2022 Bloomberg L.P.

AMTD Digital, Parent Plunge in Wake of Baffling 32,000% Rally

The massive rally in two little-known Hong Kong-based financial services firms is ending just as quickly as it began.

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