AMTD Digital isn't a meme stock
- Felix Salmon, author of Axios Markets
An obscure company started trading on July 15, at $7.80 per share. By August 3 it traded, at one point, for $2,555.30 per share. It's a pattern that looks very familiar — but don't be fooled. AMTD Digital isn't a meme stock.
Why it matters: Sometimes markets act in inexplicable ways; this was one of those cases. But there's no retail frenzy behind HKD, the ticker symbol of AMTD Digital, and there's no Discord server or Reddit thread full of teens investing their entire net worth in this crazy bet and trying to drive it to the moon.
Between the lines: Consider Wednesday, the most frenzied day of trading. If you look at the minute-by-minute tape of that top tick, however, "frenzied" hardly describes what was happening.
- There was one trade at 1:08pm at $1,800 per share, then a gap of six minutes where nothing happened, then another trade at $2,090, then a five-minute gap, one more trade at $2,200, another six-minute gap, and then the single $2,555.30 trade at 1:25pm.
- By Thursday afternoon, more than an hour passed without a single share trading hands.
Be smart: AMTD Digital is a small Hong Kong company that has a separate listing in New York. In no way should the company as a whole ever be valued by extrapolation from a single weird trade in its American depositary shares.
The bottom line: Meme stocks act in weird but real ways — companies like AMC movie theaters can raise real money from their meme status, and hedge funds like Melvin Capital can lose money if they find themselves on the wrong side of a meme trade.
- AMTD Digital, by contrast, is just odd. It saw a few bizarre trades, for reasons we can only guess. It's unlikely that any great fortunes were made or lost. Either way, don't blame the kids.