One of the biggest stories of the week for investing has been the sudden and unpredicted increase in the valuation of recent IPO AMTD Digital (NYSE:HKD). Here’s a look at what happened and how an investment on the first day of trading has fared.
What Happened: Digital solutions platform AMTD Digital Inc. is a subsidiary of AMTD Idea Group (NYSE:AMTD). The company is a digital solutions platform in Asia and provides solutions like digital financial services, ecosystem solutions, digital media, content and marketing and digital investments.
The company raised $125 million in an IPO, selling 16 million American depositary shares (ADSs) at a price point of $7.80 in July.
The company states it has no idea what caused the sudden rise in the valuation of the company and the rise of the share price, but did put out a thank you to the investor community Tuesday.
“To our knowledge, there are no material circumstances, events nor other matters relating to our Company’s business and operating activities since the IPO date,” the company said.
AMTD Digital announced it has granted underwriters the option to purchase an additional 2.4 million ADSs at the $7.80 IPO price.
Shares of AMTD Digital opened for trading on July 18 at $22.44 and closed the day up 23.9% at $27.80, already a large gain from the IPO pricing.
Over the last several trading sessions, shares have rocketed higher, hitting a high of $2,521.72 on Tuesday.
AMTD Idea Group, which owns over 80% of the company, has also seen high volatility and shares are up over 300% to $8.58 on Tuesday at the time of writing.
With the significant rise in AMTD Digital’s share price, the company has a market capitalization of $342 billion, ranking 19th in the world for all publicly traded companies. AMTD Digital passed the market capitalizations of well-known companies like Procter & Gamble (NYSE:PG), Coca-Cola (NYSE:KO), PepsiCo (NYSE:PEP), Chevron (NYSE:CVX) and Mastercard Inc (NYSE:MA).
Related Link: Benzinga’s IPO Calendar
Investing $1,000 In AMTD Digital: Investors were likely not able to get an allocation for AMTD Digital shares at the IPO price of $7.80.
A hypothetical $1,000 investment in AMTD Digital shares at the IPO price could have purchased 128.21 shares. The $1,000 investment would be worth $233,342.20 today.
Investors were more likely to be able to accumulate shares once the company began trading publicly. A $1,000 investment in AMTD Digital at its opening price of $22.44 on July 18 could have purchased 44.56 shares.
The same 44.56 shares would be worth $80,208 today. This represents a return of 7,920.8% in less than one month.