WTF, HKD, AMTD? A stock you haven't heard of that's risen 30,000% in two weeks

WTF, HKD, AMTD? A stock you haven't heard of that's risen 30,000% in two weeks ...

Contents

Before we get into this situation, we'll establish the number one most important thing: This is about as high as risk as stocks are. This stock has just IPOd, is located in a foreign country, and has raised 30,000% in two weeks on very low volume.

Okay, the disclaimer is gone. Let's look at what's happening in (HKD).

What do AMTD Digital (HKD) do?

AMTD Digital is a Hong Kong based investment banking business that has developed a digital platform called AMTD SpiderNet. It's a metaverse ecosystem, and it's mostly used by fintech start-ups and internet influencers, so get yours while you're at it.

Is there a Wix Free Website Builder vibe here? No? Just us?

If the italics were not clear enough, we're being sarcastic, the website's explanation of SpiderNet is extremely vague.

What may be gleaned from the website is this:

The website explains in its entirety. After looking through a few press releases, we were able to discover that the SpiderNet platform intends to provide capital and technology to digital startups as well as networking services to other digital startups. In turn, SpiderNet collects a fee from its members, which is where it gets most of its revenue.

AMTD Digital is a fintech company based in Hong Kong that basically provides loans and services to startups for fees.

Is it possible for AMTD Digital to quickly become the 26th largest stock in the United States by market cap? Lets take a moment to learn more about the stock before we make a judgment.

TheStreet Recommends You

Add another housing bear to Bank of America's Think Tank

Starbucks Is Trying To Remix Your Summer With These New Drinks

Elon Musk Unveils a Summer Reading Idea

Are you ready to start trading technicals? Try Rebel Weekly. Two actionable trade ideas designed to capture technical breakouts and breakdowns will send to your inbox every week.

AMTD Digital Stock's Ascension

The HKD stock has risen to the 13th largest market cap stock, surpassing (WMT) since it was first reported - Get Walmart Inc. Report.

AMTD Digital is a relatively unknown entity, apart from FinTwit and Wallstreetbets. We'll shine the light on it:

  • At its debut, AMTD Digital had a reasonably high price-to-earnings ratio of 18 higher than the average Chinese fintech ratio of ~5.
  • Currently trading at $2,555.30, the P/E ratio has risen to a whopping 13,160.
  • The market cap is currently 386,745M placing it just below (XOM) - Get Exxon Mobil Corporation Reportin size, and above companies like Walmart, (DIS) - Get The Walt Disney Company Report, and McDonalds.
  • According to a recent filing, AMTD Digital has only 51 employees.
  • AMTD Digital is owned by AMTD Idea Group (AMTD), which has also had a relatively swift rise.
  • During its second year of operation (2020), AMTD Digitals revenue grew more than 10X.
    • Following that impressive growth, annual revenue slowed significantly, falling to 17% in 2021.
    • In 2022, revenue growth has fallen to just 4% according to its most recent SEC prospectus.
  • AMTD Digital operates with relatively high margins 88% in the most recent fiscal year.
    • However, included in that profit margin calculation is the gains from its equity investments.
  • AMTD Digitals meteoric run has been against a backdrop of declining volume which was already low to begin with.
  • Following that impressive growth, annual revenue slowed significantly, falling to 17% in 2021.
  • In 2022, revenue growth has fallen to just 4% according to its most recent SEC prospectus.
  • However, included in that profit margin calculation is the gains from its equity investments.
  • Following that impressive growth, annual revenue slowed significantly, falling to 17% in 2021.
  • In 2022, revenue growth has fallen to just 4% according to its most recent SEC prospectus.
  • However, included in that profit margin calculation is the gains from its equity investments.

After seeing this picture, the HKD climbed to $2,555.30.

AMTD Digital (HKD)'s Mysterious Run: A Compilation

If we were to summarize the most recent AMTD movement in terms of length, we would conclude that nothing about this run makes sense.

  • The low volume does make sense given the massive run.
  • The P/E ratio is absurdly high compared to its sector, and even the rest of the market.
  • The market cap doesnt make sense given that AMTD Digital is a company that few people have ever heard of, and is also (for now) the 16th largest stock by market cap trading in the United States.
  • The revenue slowing from 10X to just 4% doesnt justify the run, either.

If it seems like we are being critical, yes. You should be too. The stock market can be a valuable tool for the accumulation of wealth, but it can also trap investors and traders who aren't careful about their investments. Often, if something seems too good to be true, it likely is. Disciplined traders do their research.

Trade smarter. Today, start looking for an unusual option activity.

You may also like: