current position:Home>Who caused the 100 billion dollar demon stock AMTD Digital Technology to rise and fall? When will the US SEC take action?

Who caused the 100 billion dollar demon stock AMTD Digital Technology to rise and fall? When will the US SEC take action?

2022-08-06 11:37:26Chinese Industry Information Station

Blowout multiple times

In the 16 trading days since its listing on July 15, AMTD Digital's share price rose from US$7.8 to around US$880 after the market opened on August 5. During the period, it soared to US$2,555.3 per share, with the highest increase of 327.6Times, the market value once exceeded 470 billion US dollars, and surpassed Alibaba to become the second largest market capitalization stock, and became the "third largest financial company in the world" after Berkshire Hathaway and JPMorgan Chase.

Since August 3rd, AMTD Digital has plummeted for 2 consecutive days, down 34.48% and 27.27% respectively.

As of the close of trading on August 6, AMTD Digital's share price was reported at US$721.13, down 9.85%, with a total market value of US$133.4 billion, which has dropped by about US$340 billion from the peak of US$472.6 billion.

Sophie Lund Yates, chief equity analyst at Hargreaves Lansdown, believes there is no quantifiable reason for the trajectories behind this unusual share price trading behavior, as these behaviors are driven by emotions, which are based on a limited amount of information.

Unlike A-shares, which have a price limit of 10% or 20% for individual stocks, US stocks do not have a price limit system for individual stocks, but a circuit breaker will be triggered during the session.AMTD Digital has also triggered the circuit breaker mechanism many times in the previous skyrocketing and falling.

According to Yan Zhaojun, a strategic analyst at Zhongtai International, according to the latest regulations of the US Securities and Exchange Commission (SEC), in addition to the circuit breaker mechanism for the broader stock market, there is also a mechanism to "limit the upper and lower limits of price fluctuations".If the trading price of a single stock rises or falls by more than 10% within 5 minutes, trading needs to be suspended.If the trading price of the stock does not return to the specified "price fluctuation range" within 15 seconds, trading will be suspended for 5 minutes.For stocks in the S&P 500 and Russell 1000 and 430 exchange-traded products priced above $3, the SEC-specified "price range" is a 5% increase or decrease, with other flows trading below $3The "price volatility band" of weaker stocks was relaxed to 10%.

In addition, on August 5, AMTD Digital also announced that the underwriters of its mid-July IPO had decided to exercise its full greenshoe option to purchase up to an additional $240 at the listing price of $7.80 per share.million American depositary shares.AMTD Digital said that it expects the issuance of additional shares to be completed before August 8.

Who caused this?

The involvement of such a huge amount of capital to hype up an unknown company inevitably reminds people of the power of retail investors to form a group.But Citron Research, a subsidiary of Andrew Left, tweeted: "AMTD Digital is not a meme stock."

The agency believes that while it was foolish to fix the price, it only traded 339,000 shares on August 2, which did not arouse the imagination of retail investors like Game Stop."Obviously, there is no securities lending, and the fees, if any, are staggeringly high. The SEC doesn't regulate market capitalization."

The so-called "meme stocks" refer to stocks that have become trading hot spots because of Internet trends.Although Citron Research has publicly stated that AMTD International is not a group stock for retail investors, according to data from Quiver Quantitative, an alternative data provider that tracks Reddit group activity, AMTD Digital is indeed the second most popular among Reddit-owned WallStreetBets in the past 24 hours.'s stock symbol.

Intense speculation by retail investors has once again rattled many on Wall Street.

Former SEC Chairman Jay Clayton said: "As we've learned over the past two years, events like this create what I would say profit opportunities, but especially for our retail investors, the risk of lossIt's huge."

Famous big bear Jim Chanos also tweeted his frustration with the "mania": "So we're all ignoring the $400 billion in MEME stock here? We do hold for GME and AMC's $30 billion runcongressional hearings, but not today.”

Previously, the sharp fluctuations in "meme" stocks such as Game Station caused the market to urge the SEC to reform the stock trading rules.

According to the "Wall Street Journal" report on June 8, the SEC plans to significantly revise the regulatory rules involving the operation of the stock market, or may significantly change the operation mode of the US stock market.

The report quoted sources as saying that SEC staff in the past few weeks have begun to study major changes to stock market regulations, and also pointed out that SEC Chairman Gary Gensler will deliver a speech mentioning the relevant changes.The sources pointed out that the proposed amendments include requiring securities firms that execute a large number of individual investor orders to use a bidding method for high-frequency traders to bid for the batch of orders, in order to reduce the level of commissions that individual investors must pay.

However, this reform has yet to be followed.

“Comparatively speaking, the U.S. stock market has a large amount of funds and a wide variety of transactions. Market players can make more use of their own advantages and capabilities to adjust, and the market system has a stronger ability to restrain participants. At the same time, the U.S.The legal and regulatory system is also stricter for the accountability of listed companies, law firms, accounting firms, etc. after the fact." Chen Xin, a professor at the Shanghai Advanced Institute of Finance at Shanghai Jiaotong University, told The Paper that the underlying legal system of the US stock market is setAfter that, it mainly relies on market forces to adjust itself, rather than relying on supervision and administrative means to intervene in real time.Overall, U.S. markets price stocks more efficiently.

Tian Cechan, founder and CEO of GuruFocus, told The Paper: "I think this is a market behavior (referring to hyping up stocks similar to Shangcheng Digital), which has little impact on the entire stock market, only accounting forA small proportion is limited to some small companies. As long as the information is transparent and openly traded, there is no need for mandatory supervision.”

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