AMTD Digital (NYSE:HKD) rose 25% in volatile pre-market trading this morning as traders tried to figure out what was happening in Hong Kong. Since the opening bell, HKD stock has been on a wild downward ride and currently sits at about 10% in the green.
Small, thinly traded Hong Kong stocks like Magic Empire Global (NASDAQ:MEGL), which was taken on a ride after its initial public offering (IPO) last year, are being rapidly pumped, then dumped, in Hong Kong.
HKD Stock: Hong Kong’s Speculative Frenzy
Bull and bear cases are to be made on the renewed speculative action.
The bull case is that it could be a reaction to the recent rise in U.S. tech stocks, which are up after earnings. And it could also represent new , which would also be good news.
On the other hand, the U.S. run may be ending. The Chinese traders could be getting in and out while they can. Amazon (NASDAQ:
AMZN), for instance, jumped over $13/share after it reported earnings on April 27, then and opened $2.50 below its Thursday close.
AMTD jumped earlier this month without reporting news and, until April 27, had been falling steadily in price. The company owns a French fashion publication called L’Officiel, . It also produces action movies in Hong Kong.
The latest move still has AMTD below its April 11 high, which in turn, is just one-third of a speculative run to almost $30 per share in early January. At that time, one American reporter called AMTD
What Happens Next?
AMTD may be but there’s always excitement around speculation. It could mean a return to growth in Asia, or it could just be traders taking advantage of a rising market here to draw in some chumps.
On the date of publication, Dana Blankenhorn held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
