Shares of Hong Kong fintech firm AMTD Digital continued to plunge on Thursday, crashing for a second day in a row after rising more than 21,000% since its July IPO, with experts calling it a new meme stock and warning investors to stay away from the stock as its valuation looks like “an absolute scam.”
AMTD Digital’s stock fell nearly 30% on Thursday, down to $700 per share, after a 35% decline a day earlier.
Up until Wednesday, the stock had been skyrocketing since its mid-July IPO for no apparent reason (even the company appeared baffled by the wild swings) drawing comparisons to the meme stock trading frenzy that occurred in early 2021.
Before the recent declines, the stock had surged as high as $2,555 per share (up from an IPO price of just $7.80), at one point giving the company a valuation of more than $300 billion and making it one of the largest in the United States by market capitalization.
Despite the stock’s recent struggles, AMTD Digital still has a market capitalization of nearly $160 billion, giving the company a higher valuation than big names like Morgan Stanley, Intel, CVS and AT&T.
“AMTD feels very ‘memesque,’” says Jim Osman, CEO of research firm The Edge Consulting Group, who adds that “on a valuation basis, it’s ludicrous, but as we’ve seen in the last two years, valuations on meme stocks count for nothing.”