AMTD Digital, a little-known fintech company based in Hong Kong, has been skyrocketing since it went public in the U.S. just over two weeks ago, surpassing Chinese e-commerce giant Alibaba Group in market capitalization.
AMTD Digital saw its market cap reach $310.6 billion on Tuesday, more than 100 times the level at its initial public offering on July 15. With that number, the Hong Kong-based unit of investment holding company AMTD Idea Group overtook Alibaba, whose market cap came to $237.3 billion, as the No. 1 Chinese company listed in the U.S.
It also soared to 25th in global ranking, leapfrogging such multinationals as Toyota Motors, Coca-Cola and Pfizer, according to Quick/FactSet.
The stock fell 30% Wednesday to close at $1,100, bringing down its market cap to $203 billion.
Based on a net profit of about 170 million Hong Kong dollars ($21.7 million) for the year ended April 2021, AMTD Digital is trading at nearly 6,000 times its earnings per share.
This has prompted many market pros to call the stock a bubble waiting to burst.
AMTD Digital offers digital financial services and for a solutions platform for entrepreneurs called SpiderNet. In response to the price surge, the company in a statement Tuesday that "there are no material circumstances, events nor other matters relating to our company's business and operating activities since the IPO date."