Hong Kong businessman suddenly became a billionaire richer than Ly Gia Thanh

A Hong Kong businessman suddenly became richer than billionaire Li Ka-shing this week thanks to a 32,000% increase in his shares.

Mr. Calvin Choi, Chairman of financial services group AMTD Group, has amassed a huge fortune at a record speed. Less than a month after the 43-year-old listed AMTD Digital on the New York Stock Exchange, the company's stock has skyrocketed for inexplicable reasons.

According to Bloomberg , from an IPO price of $7.8, AMTD Digital stock peaked at $2,555 on Tuesday, a jump of more than 32,000%. By Wednesday (August 3), this stock cooled down but was still 14,000% higher than when it was listed, helping Mr. Choi's stake in AMTD Digital to be worth $36.8 billion, according to Forbes .

However, the value of his stake in AMTD IDEA - the parent company of AMTD Digital - is still worth just under $500 million. Given this "madness" and the way the shares are structured, Forbes said it did not include Mr. Choi in their list of billionaires.

A spokesman for AMTD Group confirmed Mr. Choi's stake, but declined to comment on the market value of those shares. AMTD Digital is a thinly traded stock, but the company's market capitalization on August 3 stood at a whopping $203 billion.

Mr. Calvin Choi, Chairman of AMTD Group. Photo: AMTD

According to Brendan Ahern, Chief Investment Officer at KraneShares, the performance of AMTD Digital stock has the color of "meme stocks". This term is used to refer to stocks that have increased sharply thanks to some contagion effect that has nothing to do with business activities. Last year, two prominent "meme stocks" were AMC Entertainment and GameStop.

"I'm not entirely sure what the business model of this company is, but it doesn't matter to the crowd of Reddit (an American social media platform) who are plunging into this stock." , Max Gokhman, Investment Director of AlphaTrAI, commented.

In terms of market capitalization, AMTD Digital's size achieved on August 3 is larger than Walt Disney and Morgan Stanley, but only 50 employees in offices in Hong Kong and Singapore as of February 2022.

Their financial performance also cannot support the huge market capitalization. For fiscal year 2021 ending April, AMTD Digital reported a 16.9% increase in revenue from a year earlier, to HK$195.8 million (approximately $25.2 million) and profit increased by 8.9% to 172.5 million Hong Kong dollars.

Calvin Choi, a former UBS executive, controls AMTD Digital through a network of companies. His 100% owned company - Infinity Power Investments - holds a 20.4% stake in AMTD Digital's parent company, AMTD IDEA (also known as AMTD International), but has majority voting rights (51.3%) ) through class B shares. AMTD IDEA itself also owns 88.7%, including all class B shares of AMTD Digital.

Shares of AMTD IDEA, which is dual listed on the New York and Singapore Stock Exchanges, also spiked. Its value has more than tripled since the start of the week and had a market capitalization of $2 billion as of the end of August 3.

According to Forbes estimates , Mr. Choi's stake in AMTD IDEA is worth about $480 million on paper. Another method to calculate his net worth on paper is to calculate his indirect stake in AMTD Digital worth $36.8 billion as of August 3.

On this basis, he is the sixth-richest person in Asia, surpassing Hong Kong's richest man Li Ka-shing ($35.6 billion) and Tencent boss Ma Huateng. (33.8 billion USD). However, the value of AMTD Digital stock is not sustainable. It continuously plummeted 34.5% on August 3; 27% on 4/8 and 6.25% on 5/8.

Closing this week, AMTD Digital stock is also down 57% from the peak it reached on Tuesday (August 3), equivalent to a value of $175 billion lost, more than Morgan's market capitalization. Stanley, Intel or Goldman Sachs.

AMTD Group was co-founded by CK Hutchison of billionaire Ly Gia Thanh and Commonwealth Bank of Australia in 2003 to provide financial services. AMTD Group, short for "addition, subtraction, multiplication, division", was then controlled by Morgan Stanley until 2015.

In a statement on August 4, CK Group said it sold a majority stake in AMTD Group nearly ten years ago. The company is also negotiating to sell off the remaining shares. CK Group is not represented on the board of directors of AMTD Group, nor is it involved in any operating activities.

Mr. Choi, formerly a manager at PwC Hong Kong and Citigroup, joined AMTD Group in 2016 as Chairman and CEO. Returning from Canada with a bachelor's degree in accounting from the University of Waterloo, he said three years ago that he wanted to build "a Chinese investment bank" and help Chinese businesses expand globally. bridge.

At that time, Mr. Choi began to expand AMTD Group's business activities into investment banking, asset management, insurance brokerage and other areas. He launched AMTD IDEA amid corporate restructuring in 2019. AMTD IDEA claims to be Asia's leading investment bank and has underwritten 54 IPOs, mainly for Chinese companies listed in China. Hong Kong and America.

Some of their prominent customers include smartphone maker Xiaomi and delivery giant Meituan. However, nearly 90% of US IPOs the company underwriters fail, according to a 2021 study by Hindenburg Research.

AMTD IDEA itself is also currently one of the companies at risk of being delisted from the US stock exchange because it has not been inspected by the country's audit watchdog for three consecutive years.

Despite doubts and criticisms, AMTD IDEA has attracted large investors such as Century City International Holdings (Hong Kong). Other backers include Xiaomi, Morgan Stanley Private Equity Asia, Sun Hung Kai & Co and David Chu, Chairman and CEO of real estate developer Far East Consortium.

AMTD Digital was also launched in 2019 and operates as a "one-stop digital solutions platform". The company markets one of its core businesses as SpiderNet Ecosystem Solutions, as a "digital hyperconnector and accelerator" for businesses in Asia.

According to AMTD Digital's prospectus, the SpiderNet Ecosystem is described as essentially a membership fee scheme that provides customers with access to investors, business executives, and professionals. academic.

Other businesses of AMTD Digital include a virtual bank co-developed with Xiaomi, investments in startups, partnerships with financial conferences such as the World Economic Forum and the Fintech Festival. Singapore, as well as investing in film production.