AMTD Digital Stock Has Taken Investors On A Wild Elevator Ride: What's Going On?

AMTD Digital Inc - ADR HKD shares lit up headlines last week after the stock squeezed significantly higher, making the digital solutions platform company one of the most valuable firms in the world by market cap.

Investors who bought the top last week are feeling the pain Monday morning with the stock down about 20%. AMTD Digital shares have fallen more than 75% from the highs made on Aug. 2.

What Happened: AMTD Digital made its public debut in mid-July. The charge higher came in the wake of the company's IPO, but there wasn't any apparent news that sent shares higher. However, the stock was trending across social media platforms last week, suggesting that the rally may have been driven by strong retail demand. 

AMTD Digital released a statement last week, thanking investors for their support through the successful completion of its IPO, which saw 16 million American depositary shares offered for $7.80 per share.

"During the period since our initial public offering, the Company noted significant volatility in our ADS price and, also observed some very active trading volume. 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," the company said.

The 32,000% surge in AMTD Digital shares caught the attention of Hindenburg Research's Nate Anderson. The short seller highlighted valuation concerns near the peak. 

"$HKD is a new IPO that just surged to a market cap of over $425 billion, despite having only ~$25m in annual revenue," Anderson said, noting AMTD Digital is largely owned by AMTD IDEA Group - ADR AMTD, which Hindenburg has previously covered. 

AMTD Idea Group currently has a market cap of around $3.5 billion, according to data from Benzinga Pro.

Despite losing three-quarters of its value from the peak, AMTD Digital is still trading with a market cap above $100 billion. 

See Also: If You Invested $1000 In The AMTD Digital IPO, Here's How Much You'd Have Now

HKD Price Action: AMTD Digital shares traded as high as $2,555.30 before pulling back.

The stock was down 15.13% at $600 at time of publication Monday.

Photo: JoshuaWoroniecki from Pixabay.