This Small Company Has Just Surpassed Goldman Sachs After Achieving A Return Of 14,000 Percent.
- Thursday, 04 Aug, 2022
AMTD Digital, a Hong Kong-based firm that has just listed in New York, has seen a significant increase in its share price.
It would seem that the world now has a new financial behemoth.
As of the end of trading on Wednesday, the aggregate market value of AMTD Digital Inc.'s Class A and Class B shares was more than $203 billion. AMTD Digital Inc. is a Hong Kong-based business that listed in New York less than three weeks ago.
This indicates that the company, which creates digital enterprises, including financial services, is worth more than Wells Fargo & Co., Morgan Stanley, and Goldman Sachs Group Inc., despite the fact that the company only reported $25 million in sales for the year that ended in April 2021.
That places it, at the very least on paper, behind Berkshire Hathaway Inc., JPMorgan Chase & Co., Bank of America Corp., and Industrial & Commercial Bank of China Ltd. as the fifth-largest financial business in the world.
In spite of this, Choi was present on the trading floor of the New York Stock Exchange on July 15, where he rang the opening bell just as shares of AMTD Digital were about to start moving in an upward direction.
From its original public offering price of $7.80, they have subsequently increased by a whopping 14,000 percent. On Wednesday, the wild trading continued, with the stock ending down 34 percent after climbing as high as 26 percent and causing many trade halts along the way.
Although it is a mystery why the stock has skyrocketed, several experts have referred to the company's very small public float as a possible explanation. It is also not obvious why investment bank AMTD Idea Group, which is another company within the AMTD Group umbrella, has joined in on the rise, since the stock has increased by 458 percent between July 15 and Wednesday's closing.
Despite a decline of 11 percent, that stock was the fourth-most-bought business on the trading platform offered by Fidelity on Wednesday. This suggests that individual investors are more interested in purchasing it.
A request for comment sent to AMTD Digital was not immediately met with a response. It said in a statement on Tuesday that it is monitoring the market for any trading abnormalities and that it is unaware of any "material circumstances, events, or other matters" that could be affecting the stock price. However, it did say that it is monitoring the market for any trading abnormalities.
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After working at UBS for a period of five years, Choi moved on to become the Chairman and Chief Executive Officer of AMTD Group Co. in 2016.
It was established in 2003 with funding from Li Ka-CK shing's Hutchison Holdings Ltd., and it is the parent company of AMTD Digital and AMTD Idea Group, both of which are listed in Singapore and the United States, respectively.
AMTD Idea also has well-known individuals supporting it. A 5.8 percent share in the company is held by Century City International Holdings Ltd., which is controlled by members of the Lo family, which is prominent in the real estate industry in Hong Kong. In 2019, Morgan Stanley made an investment in a financing round via one of its divisions.
Choi, who was born in Hong Kong and is now a citizen of Canada and attended the University of Waterloo for his accounting education, is the sole owner of a vehicle that has control over 32.5% of AMTD Group.
As a result of the acquisition of a majority share in it by his father's firm in 2015, his paternal grandfather is also engaged. AMTD Idea is owned by AMTD Digital, which is owned by AMTD Group, which is owned by AMTD Idea, which is owned by AMTD Group.
Over the last several years, Choi has been a regular presence at the yearly financial technology meetings held in Singapore.
At a conference that was co-hosted by the Monetary Authority of Singapore, Choi spoke on panels alongside other executives, one of whom was the Chief Executive Officer of Standard Chartered Plc, Bill Winters. AMTD Group was one of the event's most prominent sponsors for the past three years running up until 2019.
However, earlier this year, authorities in Hong Kong prohibited Choi from working in the securities business for a period of two years for failing to declare conflicts of interest in deals that he worked on while employed at UBS. He is challenging the verdict in court.
AMTD Group investor China Minsheng Investment Group Corp., which was responsible for installing Choi as CEO of the company, eventually turned against him and at one time hung posters in the central area of Hong Kong criticizing him.
In a separate development, Hindenburg Research has been quite critical of AMTD Group. In a study published in April 2021 on Ebang International Holdings Inc., a cryptocurrency firm located in China, a short seller said that the company had a "abysmal" track record as an underwriter, with 87 percent of its US initial public offerings (IPOs) ending in losses.
In a statement from the previous year, Choi acknowledged the difficulties that he had to overcome.
"There are people who are envious and jealous, and there are others who are cold-eyed and mockers, and there are those who are nasty," he remarked. "There are slanderers." However, business owners have a responsibility to demand that progress is the last word.
People from Hong Kong to New York are guessing about what, if anything, may be behind the changes in AMTD's stock as a result of its recent increase. One possible cause is that just a tiny percentage of the company's shares are actively traded in the market.
Thomas Nip, a research analyst at Valuable Capital Ltd. in Hong Kong, said that "the stock is significantly expensive." Valuable Capital Ltd. The fact that there is a minimal free float in the company's shares indicates that it will be simpler for large owners to drive up the stock price.
Despite the fact that the recent rally in the United States was reminiscent of the retail trading mania that drove up shares of companies including GameStop Corp. last year, some Reddit and Twitter users appeared baffled by the gains, and they denied claims that the sub-reddit Wall Street Bets was behind the moves.
AMTD Digital's market worth surpassed $400 billion at one point on Tuesday, while AMTD Idea shares soared as much as 520 percent within the same time period.
OktayKavrak, director of Leverage Shares, said that "given the rapidity of its ascension, I have a sense that this one will nosedive." It is my hope that investors will grab gains along the road since the ultimate fall will return HKD to relative obscurity.