Hong Kong billionaire Li Ka-shing’s firm is selling its stake in fintech upstarter AMTD Digital’s parent company, after the company staged a massive rally this week, according to a statement released on Thursday.
Hong Kong-based AMTD Digital was worth more than $203 billion when New York markets closed Wednesday, making it the world’s fifth-largest financial company on paper, Bloomberg reported.
AMTD Digital just listed three weeks ago and reported revenue of $25 million for the fiscal year ended April 2021.
Li’s CK Group said in a statement that it owns less than four percent of AMTD Digital’s parent company, AMTD Group, and has entered negotiations to sell those shares.
CK added that it has no representatives on the AMTD Group board of directors and has no business relationships with or interests in AMTD Digital.
The sale would distance CK from AMTD Digital founder Calvin Choi, a former investment banker who is appealing a Hong Kong regulator ban for failing to disclose conflicts of interest.
Li’s CK said his current 4 percent stake is left over from a sale nearly a decade ago in which CK sold a majority of its stake in AMTD Group.
AMTD Group was founded in 2003 and, according to its website, lists CK Asset Holdings as a co-founder.
Analysts have partially attributed AMTD Digital’s recent rally to the small chunk of shares made available for trading.
“The company’s low free float means it will be easier for large shareholders to push the share price higher,” Hong Kong-based research analyst Thomas Nip of Valuable Capital told Bloomberg, adding that the stock is grossly overvalued .
Oktay Kavrak, a director at Leverage Shares, told Bloomberg that given the speed of its rise, AMTD Digital is poised for a “sleep”.
AMTD Digital’s rapid rally had raised questions about whether it might be the next “meme stock” — stocks skyrocketing on retail mania — much like video game chain GameStop.
In January 2021, small stock traders banded together and shook Wall Street, sending stocks like GameStop and cinema chain AMC skyrocketing and reaping massive profits.
But there’s still no evidence of a clear link between AMTD Digital’s stock movements this week and the trades, which are fueled by social media interest, with some users on Reddit forum WallStreetBets dismissing the connection.
On Tuesday, AMTD Digital said it was “not aware of any material circumstances, events or other matters related to our company’s business and operations since the IPO.”
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