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Li Ka-shing’s conglomerate disavows meme stock AMTD Digital after 14,000% surge

Hong Kong tycoon Li Ka-shing’s CK Hutchison Holdings has distanced itself from AMTD Digital after the meme stock’s value surged to more than $200bn since listing in July.

After pricing its American depositary receipts at $7.80 for its New York listing, the Hong Kong-based digital bank’s stock has risen more than 14,000 per cent and closed Wednesday’s session at $1,100.

The rally has pushed AMTD Digital’s market capitalisation to more than $203bn, easily surpassing Wall Street investment banks such as Morgan Stanley ($149bn) and Goldman Sachs ($119bn).

There was no apparent trigger for the surge, which drew comparisons to the “meme stock” trading frenzy in 2020 and 2021. AMTD Digital’s ticker HKD was one of the most mentioned on Reddit’s WallStreetBets chatroom this week, according to data from Quiver Quantitative.

AMTD Digital “expressed its appreciation of support from the investor community” in a statement on Tuesday, but said there had been no material change in circumstances or events relating to its business operations.

CK Hutchison said on Thursday it “does not hold any shares in AMTD Digital and has no business dealings with the company”. It said it holds “less than 4 per cent” of shares in AMTD Group and is in negotiations to sell them. Li is Hong Kong’s richest man and CK Hutchison’s senior adviser.

But AMTD Group, a Hong Kong-based company that partly owns AMTD Digital, said on its website that CK Hutchison “established AMTD Group in 2003 as a founding member”. AMTD Group owns a 50.6% share in AMTD Idea and AMTD Idea owns 88.7% of AMTD Digital.

On Thursday, the web page about CK Hutchison had been taken down and read “Page not found”.

Shares of AMTD Idea, which is listed in Singapore and New York, have also significantly rallied. AMTD Idea has risen 470 per cent on Wall Street since the AMTD Digital initial public offering last month.

Calvin Choi, a former UBS banker and AMTD Group chair, is contesting a two-year licence ban given by Hong Kong’s Securities and Futures Commission in June for “conflicts of interest”, according to court documents.

AMTD Digital and AMTD Idea Group did not immediately respond to a request for comment. Choi could not immediately be reached for comment.

AMTD Group holds a digital banking licence in Hong Kong, which it won in 2019 in a consortium with Xiaomi, the Chinese technology company. A bid to win a similar banking licence in Singapore the following year was not successful.

Mak Yuen Teen, an associate professor of accounting at the National University of Singapore, said that since so many of AMTD’s shares were held by its parent company, and not available freely for trading, the stock was a “classic candidate for stock manipulation”.

Turnover in AMTD Digital has fallen sharply over the past week, with less than 120,000 shares trading hands on the New York Stock Exchange during Wednesday’s session, about one-tenth of the trading volume for Goldman’s shares.

Source: Financial Times

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