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Shares of high-flying AMTD Digital fell as much as 79% over the past two days as trading volume declined.The obscure Chinese-tech firm was briefly worth more than $400 billion after the stock surged on no news.The thinly traded stock saw less than 100,000 shares change hands Thursday, well below its average of 1 million shares.
The obscure Chinese tech stock that saw its post-IPO gains swell to more than 32,000% earlier this week is now falling faster than its rise.
AMTD Digital fell as much as 50% on Thursday, extending its two-day decline to as much as 79% from its record high of $2,555 per share.
There was no apparent news driving the stock lower on Thursday, just as there was no apparent news responsible for the stock’s meteoric rise from its $7.80 IPO price in mid-July to its current price of $876.
Wednesday and Thursday’s stock price decline has come on thin volume, supporting the idea that the low-float nature of AMTD Digital’s outstanding shares has helped supercharge the stock’s rally. Just over 71,000 shares exchanged hands on Thursday, well below its average daily trading volume of 1.1 million shares.
AMTD Digital has a low share float of just 19 million shares, and more than 97% of the company is owned by its parent company, AMTD Idea Group. That means when there’s overwhelming demand for the stock, and there is limited supply of the stock from sellers, the stock price can go vertical on little buying activity.
Despite registering only $25 million in revenue in its fiscal year 2021, AMTD Digital was briefly worth more than $400 billion as its shares went parabolic on Tuesday. Today, its market value stands at $187 billion, making it still worth more than Verizon, Nike, and Salesforce, among other well known blue-chip companies.
In a statement issued earlier this week, AMTD Digital thanked investors for helping it successfully complete its IPO, and said that it was unaware of any material news that would be responsible for the incredible trading action seen in its stock.
AMTD Digital trades on the New York Stock Exchange. A spokesman for the NYSE declined to comment on the trading activity in AMTD Digital.
Markets Insider