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HK conglomerate distances itself from AMTD Digital after 14,000% stock surge

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

After pricing the American Depositary Receipts at $7.80 for New York listing, shares of the Hong Kong-based digital bank rose more than 14,000% to close Wednesday’s session at $1,100.

The rally pushed AMTD Digital’s market capitalization to more than $203 billion, easily outpacing Wall Street investment banks including Morgan Stanley ($149 billion) and Goldman Sachs ($119 billion).

CK Hutchison said Thursday that it “does not own shares in AMTD Digital and has no dealings with the company.” It said it owns “less than 4%” of the shares in AMTD Group and is in negotiations to sell them. Li Ka-shing, the richest man in Hong Kong, is CK Hutchison’s senior adviser.

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

On Thursday, the web page about CK Hutchison was removed and it said “page not found”.

The share of AMTD Idea, which is traded in Singapore and New York, also rose significantly. AMTD Idea is up 470 percent since AMTD’s digital IPO last month.

Calvin Choi, a former UBS banker and chairman of AMTD Group, appealed a two-year license ban handed down by the Hong Kong 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 license in Hong Kong, which it won in 2019 in a consortium with Xiaomi, the Chinese technology company. A bid to win a similar banking license in Singapore the following year was unsuccessful.

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

There was no stated reason for the increase, which drew comparisons to trading in “Memim” shares in 2020 and 2021. AMTD Digital’s HKD ticker was one of the most mentioned in Reddit’s WallStreetBets chat room this week, according to data from Quiver Quantitative.

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

HK conglomerate distances itself from AMTD Digital after 14,000% stock surge Source link HK conglomerate distances itself from AMTD Digital after 14,000% stock surge

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