AMTD Digital trading under the ticker HKD is valued at nearly $140 billion
Robinhood CEO grilled at GameStop hearing
House lawmakers questioned the CEO of Robinhood Markets, Inc. as they considered whether recent wild swings in GameStop’s price exposed conflicts in market structure that could harm unsophisticated investors. (February 18)
- AMTD Digital is the latest meme stock
- Meme stocks have been all the rage during the pandemic as individual marketers with plenty of time have jumped online and into stocks in droves.
- They found that. together they could drive up stock prices and crowd out hedge funds to push stocks to extraordinary heights.
21,426% – this is the amount of AMTD Digital shares, trading under the symbol “HKD”, which have risen since its IPO on July 15. In other words, if you had only bought a single share of AMTD Digital at its IPO price of $7.80 and sold it at Tuesday’s closing price, up 184% for the day, you would have earned $1,671.
Shares of AMTD Digital’s parent company, AMTD Idea Group, a Chinese financial firm trading under the symbol “AMTD”, have risen 525% over the past month and closed up 238% on Tuesday.
But if you’re not active on FinTwit, short for financial Twitter where users tweet about the investment moves they’re making or Reddit’s famous Wallstreetbets forum, you’ve probably never heard of it.
In that case, welcome to the same stock mania.
APDN action against HKD and AMTD
AMTD Digital and its parent company weren’t the only stocks to post huge gains on Tuesday.
Applied DNA Sciences Inc, which trades on Nasdaq under the symbol “APDN”, closed up 311% on Tuesday. The company announced that it has launched validation of its monkeypox virus polymerase chain reaction, or PCR, test. If validated, he will submit his test for approval to the New York State Department of Health.
A state of emergency was recently declared in New York as monkeypox cases soared to 1,400. Currently, there are only five licensed commercial labs testing for monkeypox, causing significant delays in getting results. So having another trade lab test for monkeypox could be a game-changer, hence why the stock jumped on Tuesday.
Cases of monkeypox in each state: California and New York declare emergencies as outbreak grows
However, there have been no recent major announcements that explain why AMTD Digital and AMTD Idea stock prices are skyrocketing.
“To our knowledge, there have been no material circumstances, events or other matters relating to the business and operational activities of our company since the date of the IPO,” AMTD Digital said in a statement. press release on Tuesday where she thanked investors for her “price performance”.
And that’s why they fit the definition of meme stock perfectly.
What is a meme store?
Meme stocks, born during the pandemic in 2020, are what you get when you combine social media and stock investing.
People, largely stuck at home and barely bored to spend their stimulus checks, decided to pass the time and get into the booming stock market, especially since trading was free on the Robinhood platform. These investors, many of whom likely had little experience in financial markets, scoured social media — places like Twitter, Stocktwits, Facebook and Reddit — for ideas.
Once there, they found a crowd of like-minded people and a pot full of investment ideas. As they discussed among themselves, certain ideas emerged. RoaringKitty (aka Keith Gill) has been touting GameStop’s stock on Reddit as well as in YouTube videos since 2019. During the pandemic, his musings have increasingly caught the attention of those bored and stuck-at-home and 2021 new investors. , a revolution in commerce had begun.
What happened with GameStop?
Interest in GameStop, considered the premier meme stock, has been gaining momentum among individual or online retail investors. The stock was heavily shorted by hedge funds, trading significantly below what people thought the stock should be worth, and former Chewy CEO Ryan Cohen joined the board. , which some believe could lead to a successful turnaround for the company.
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This narrative led investors to band together to buy GameStop shares, which quickly drove prices up and hedge funds rushed to buy shares to cover their earlier sales (known as short-covering), causing a surge in price arrow.
Online investors doubled their bets and trading became extremely volatile with wide swings from hour to hour. Some trading platforms, like Robinhood and Schwab, halted trading in these names for their clients, triggering a series of losses – first by hedge funds, then by retail traders – investigations and congressional hearings on who was to blame.
What other meme stocks have emerged?
After GameStop, emboldened online retailers found new stocks like AMC and Bed Bath and Beyond to go viral on social media. These stocks experienced similar rollercoaster trading as online investors used the same playbook. They came together online to plan their collective buying spree, which would lead to an initial price spike. This price increase would force Wall Street investors to buy stocks to cover their short positions, further boosting the stock price and benefiting retail investors as hedge funds lost money.
SLOWER TIME: Robinhood plummets as summer growth slows as trading calms
LESSONS LEARNED: 3 things all investors can learn from meme stocks like GameStop, AMC and Dogecoin
It was a turning point in the trade. Retail investors thought of themselves as little guys, pushing back the suits of Wall Street and their algorithms, and a revolution was born. Wall Street was forced to take notice, and companies like VandaTrack began collecting data to analyze where retailers were putting their money.
Medora Lee and Elisabeth Buchwald are personal finance and markets reporters at USA TODAY.
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