AMTD Digital, Magic Empire Global and Top Financial Group fall after meteoric rally

After a meteoric rally this month, AMTD Digital, Magic Empire Global and Top Financial Group fell on Tuesday after a meteoric rally that was reminiscent of last year's meme-stock frenzy.

AMTD Digital has gained eye-watering gains just days after their US market debuts, with AMTD Digital climbing to as high as US $2,555. The debut price of US $7.80 in July was dropped 30 last week. At its peak, the company's market value was smaller than that of Facebook-owned Meta Platforms.

AMTD Digital was down 45 per cent at US $221 on Tuesday. The online brokerage Top Financial was trading 14 per cent lower at US $17.70 a day after its shares doubled in value to US $20.75.

Magic Empire Global, which provides financial advisory and underwriting services, fell 81.4 per cent to US $21.53. Its shares had gone up by as much as 6,000 per cent from the US $4 IPO price in just the second session of trading on Monday.

The dramatic gains in the Hong Kong stocks were a fraction of the US companies, despite the frenzy in shares of GameStop and AMC Entertainment in 2021.

Rick Meckler's partner, Cherry Lane Investments, said they haven't seen a fundamental development you could point to and say this is why the rally is happening.

There's still a lot of interest among investors who are looking for a place to gamble. Maybe the names are changing. AMTD Digital said it was monitoring the share volatility. The underwriters of the IPO exercised the option to buy 2.4 million additional shares at the IPO price, taking advantage of the rally.

Joe Saluzzi, co-owner of trading at Themis Trading in Chatham, New Jersey, said it was strange that the stock exchanges or regulators are not getting more involved because it doesn't sound like an efficient market.

Hong Kong-based companies did not respond to requests for comment outside business hours.