- AMTD Digital is the new meme collection.
- Meme stocks were a craze during the epidemic, as individual traders who often held hands jumped into the stock online and en masse.
- They found out. Together, they can push stocks to exceptional heights by boosting stock prices and squeezing stock funds.
21,426% – that’s AMTD Digital stock, traded under the symbol “HKD” since its July 15 IPO. In contrast, if you bought one share of AMTD Digital at the stock’s IPO price of $7.80 and sold it on Tuesday, the closing price, up 184% for the day, you would have made $1,671.
AMTD Digital’s parent company, AMTD Idea Group, a Chinese financial company trading under the ticker symbol “AMTD,” has surged 525 percent in the past month.
But if you’re not active on FinTwit, users may have never heard of their investment activity or Reddit’s famous WallstreetBets forum, short for financial Twitter.
On this occasion, welcome to meme stock mania.
APDN stock with HKD and AMTD
AMTD Digital and its parent company weren’t the only stocks to make big gains on Tuesday.
Applied DNA Sciences Inc, listed on the Nasdaq under the symbol “APDN,” jumped 311% on Tuesday. The company has announced that it has begun validating the monkey virus polymerase chain reaction, or PCR test. If confirmed, it will submit the test to the New York State Department of Health for approval.
A state of emergency was recently declared in New York after the monkey disease cases reached 1,400. Currently, there are only five licensed commercial laboratories that test for monkeypox, contributing to the lead time delay in results. So another commercial lab test for monkeypox could be a game changer, hence why the stock soared on Tuesday.
Monkey disease in every stateCalifornia, New York have declared states of emergency as the outbreak escalates.
However, there haven’t been any recent major news announcements to help explain why AMTD Digital and AMTD Idea’s share prices are exploding.
“To our knowledge, there have been no material events, arrangements or other matters related to our company’s business and operations since the IPO date,” AMTD Digital said in a statement Tuesday, thanking investors for its “value performance.”
And that’s why they fit right under the meme stock definition.
What are meme stocks?
Meme stocks born during the 2020 pandemic are what you’ll earn when investing in social media and stocks.
People were mostly stuck at home and too tired to spend their motivational checks, decided to pass the time and dive into the high stock market, especially on the Robinhood platform where trading was free. These investors, many of whom probably had little experience with the financial markets, scoured social media — places like Twitter, Stockwits, Facebook and Reddit — for ideas.
Once there, they found people just like themselves and a pot full of investment ideas. While discussing with each other, some ideas were captured. Roaring Kitty (aka Keith Gill) has been promoting GameStop’s stock in Reddit and YouTube videos since 2019. During the pandemic, his music attracted more attention from these new, bored, stuck-at-home investors and 2021. A revolution began in the business.
What happened to GameStop?
Interest in GameStop was considered the first meme stock gathered online among individual or retail investors. The stock was short-sold by hedge funds, trading below what people thought the stock should be worth, and former Chewy CEO Ryan Cohen joined the board in what some thought could lead to a successful business turnaround.
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That narrative led investors to rally to buy GameStop shares, sending prices soaring and hedge funds scrambling to buy shares to cover their early sales (called short covering), driving up prices.
Online investors doubled their bets, and trading became highly volatile with hour-to-hour movements. Some trading platforms, such as Robinhood and Schwab, have stopped trading under these names for their clients, leading to several losses — first to hedge funds and then to retailers — investigations and congressional hearings about who was responsible.
What other meme stocks have emerged?
After GameStop, brave online retailers found new stocks like AMC and Bed Bath and Beyond to go viral on social media. Those stocks have seen similar rollercoaster trading as online investors employ the same playbook. They get together online to plan their joint shopping spree, which results in an initial price increase. That rise in prices meant Wall Street investors had to buy stocks to cover their short positions, sending the stock price higher and retail investors making profits as they lost money selling funds.
Slow times:When the business calmed down during the summer, Robinhood fell
Lessons Learned:3 Things All Investors Can Learn From Meme Stocks Like GameStop, AMC, and Dogecoin
This was a big change in the business. Retail investors saw themselves as the little guys, beating the clothes and algorithms of Wall Street, and a revolution was born. Wall Street was forced to take notice, and companies like VandaTrack began collecting data to analyze where the retail public was putting their money.
Medora Lee and Elisabeth Buchwald are personal finance and market reporters for USA Today.
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