AMTD IDEA Stock Tanks 31% as Key Investor Quits

CK Group, a key investor in AMTD IDEA Group (AMTD), has decided to sell its entire stake in the company. AMTD IDEA is a Hong Kong-headquartered financial services group. It is the parent of financial services provider AMTD Digital (HKD), whose stock spiked an astonishing 14,000% only weeks after the IPO. This mammoth spike has raised many eyebrows on Wall Street. The unusual surge has earned AMTD Digital the meme stock label. AMTD stock fell more than 31% on August 4.

CK Group Quits AMTD IDEA Stock and Distances Itself from AMTD Digital

The billionaire Li Ka-Shing-led CK Group is selling its remaining stake in AMTD IDEA of about 4%. CK Group, which has been a longtime investor in AMTD IDEA, also clarified that it does not directly hold shares in AMTD Digital. AMTD IDEA controls 88.7% of AMTD Digital.

“Currently there is no CK Group representative sitting on the Board of AMTD Group.  CK Group is not involved in its operations and has no knowledge about any of its businesses or plans,” it said in a statement.

Closing Remarks

I think that CK Group’s exit from AMTD IDEA stock is a signal that there could be more than what meets the eye in AMTD Digital stock’s meteoric rise. AMTD Digital’s management has come out to caution that it is not aware of what is driving the stock. 

The unexplained surge at some point made AMTD Digital more valuable than major U.S. companies such as Coca-Cola (KO) and Goldman Sachs (GS), yet this is a business that only generates about $25 million in annual revenue. 

The exit of the longtime investor CK Group may be a cautionary sign that it would be better to avoid AMTD IDEA stock for now.

The TipRanks Smart Score tool shows that AMTD IDEA has a Neutral Smart Score of six out of 10, indicating that it could perform in line with market averages.

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