A Hong Kong-based tech firm sold its shares at an initial public offering (IPO) on July 15th for $7.80 each; they’re now worth over $2500, making the company the 14th largest in the world by market capitalization, The Street reported Tuesday.
AMTD Digital is a financial services company traded on the New York Stock Exchange (NYSE), and despite only having a reported $25 million in annual revenue and 51 employees, the company has overtaken the likes of Mcdonald’s, Disney, and Nike in market capitalization, according to The Street, sits at 14th overall, sandwiched between Exxon and Walmart. Company executives issued a statement Monday thanking investors for the successful completion of their IPO, but claimed they don’t know what’s driving the 32,000% increase in the listing price, according to Markets Insider.
“To our knowledge, there are no material circumstances, events nor other matters relating to our Company’s business and operating activities since the IPO date,” AMTD Digital said in its press release Monday.
Markets Insider speculates that the astounding growth could be the result of the fact that there are just 19 million shares available, and so when “there’s overwhelming demand for the stock, and few sellers, the stock price goes vertical.”
Others are less convinced by such a benign explanation and suggest that something more nefarious is going on. Finance blogger Nate Anderson points out that AMTD Digital is “88.7% owned by AMTD, a sketchy Hong Kong-based underwriter” for IPOs that he has followed in the past.
Anderson notes that AMTD has been accused of fraud in Hong Kong and that every IPO it has been behind in the past has failed, with proceeds making their way back to the parent company.
Others on the popular retail investing forum Wall Street Bets have pointed out the vagueness, poor design and misspelling in the domain name of AMTD Digital’s website while others have called it “such an obvious pump and dump.”
The U.S. Securities and Exchange Commission did not immediately respond to the DCNF’s request for comment.
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