- AMTD Digital soared over 30,000% in just three weeks since their IPO, from $7.80 to $2,555 per share.
- Nancy Pelosi visits Taiwan, exacerbating tensions between the U.S. and China and spooking the stock market.
- New legislation could see the SEC boot up to 270 China-based companies from the U.S. stock markets, including Alibaba.
- Top weekly and monthly trades
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Major events that could affect your portfolio
A no-name company based out of Hong Kong has soared up the list of the world’s most valuable companies this week. AMTD Digital managed to surpass giants like Visa, Exxon Mobil and Walmart and briefly hit a valuation of over $450 billion, despite revenue of just $25 million.
It’s been an incredible run up since the company floated on the New York Stock Exchange on July 15th at $7.80, with the stock price hitting an all-time high of $2,555.30 on August 2nd before significant falls in subsequent days. As of Friday morning, the stock is still trading at an insane $870, giving a market cap of over $160 billion.
That’s more than Morgan Stanley, Intel, IBM and American Express.
Initially it was thought that AMTD Digital was another target for Reddit’s infamous WallStreetBets crowd, but it now appears that might not be the case. Trading volumes have been too low to suggest any major retail involvement, and the discussion on the site regarding the stock has been limited.
AMTD Digital’s parent company, AMTD Idea, is also listed on the New York Stock Exchange. Despite owning over 88% of a company that is supposedly worth $160 billion, its market cap is sitting at a paltry $1.85 billion. Some savvy traders have played this link, with AMTD Idea’s price also increasing over 300% in the past month.
As yet, no reasoning has been given as to why AMTD Digital has grown so fast, with some suggestions that there may be some less-than-ethical antics at play.
Nancy Pelosi visited Taiwan this week, the highest ranking U.S. Government official to do so in 25 years. Despite operating as an independent nation since 1945, the Chinese government still claims sovereignty over the island.
The dispute is a constant source of tension in the region, with China considering any international acknowledgement of Taiwan as an insult to their authority. It’s no surprise then that they weren’t too happy about Pelosi’s visit.
Asian markets reacted to the arrival of Pelosi, with Hong Kong’s Hang Seng closing down 2.4% and Shanghai’s Composite Index dropping 2.3% on the day of her arrival. It has heightened tensions between the world’s two biggest economies, as we continue to see a trend of fewer financial ties between the countries.
The visit also comes off the back of news that up to 270 US-listed Chinese companies are at risk of being delisted from U.S. markets. The issue surrounds concerns from the Chinese government that meeting the SEC’s disclosure requirements may reveal state secrets.
The Holding Foreign Companies Accountable Act (HFCAA) would allow the SEC to de-register companies that don’t provide full and transparent disclosure from their auditors. Among the names on the watchlist is one of the world’s most valuable companies, Alibaba.
The legislation wouldn’t see companies delisted immediately, but it could commence proceedings which would see them move off U.S. markets by 2024.
This week’s top theme from Q.ai
Tech has been beaten down badly so far this year. Almost every company in every sub-sector of the industry has taken massive hits to their stock prices, regardless of their underlying fundamentals. It’s not just traditional tech companies like Alphabet, Microsoft and Amazon that have suffered either.
Crypto has been on a huge bull run over recent years, but the tide turned at the start of 2022 and we’ve seen some massive losses since then.
Over the last month, we’ve started to see some green shoots appearing across the tech industry and in the crypto space. Despite mixed announcements in the second quarter’s earnings season, in general the financial performance of many companies has been better than expected.
There are some notable exceptions, such as Meta, but forecasts have also been generally more optimistic than many investors could have hoped for. These results have driven a rally in the tech sector, which has seen stocks rise significantly in a short space of time. In order to take advantage of this, we have a number of Investment Kits specifically designed to invest in the tech sector.
Our Emerging Tech Kit uses AI to take a long position in a mix of tech ETFs, large cap tech stocks, new tech stocks and cryptocurrencies via public trusts. Every week our AI reviews multiple data sets to set the optimal mix between these verticals.
If you’re not feeling quite as confident on the direction of the market in the short term, another tech play is our Tech Rally Kit. Our AI makes this trade work with a combination of a long position on tech and a short position on the Dow.
So even if the overall market trends down or sideways, this kit can make money if the tech companies perform better than the market in general. It’s the type of trade usually reserved for wealthy investment banking clients, but we offer it to everyone.
Top trade ideas
Here are some of the best ideas our AI systems are recommending for the next week and month.
Vimeo (VMEO) – The video hosting platform one of our Top Buys for next week with an A rating in Growth and Technicals and a C in Growth and Low Momentum Volatility. Revenue was up 23.6% year on year to the end of June.
Spi Energy (SPI) – Clean energy business Spi Energy is a Top Short for next week with our AI rating them an F in our Low Momentum Volatility, Technicals and Quality Value. The company’s earnings per share are down 1.43% over the past 12 months.
Alpha Metallurgical Resource (AMR) – Coal miner Alpha Metallurgical Resource is a Top Buy for next month with an A in Quality Value and a B in our Growth factor. Analysts are projecting revenue growth of almost 100% in 2022.
Aspen Aerogels (ASPN) – The thermal insulation company is our Top Short for next month and our AI rates it as an F in Quality Value and Technicals and a C in Low Momentum Volatility. Earnings per share have plummeted 24.39% over the past 12 months.
Our AI’s Top ETF trade for the next month is to invest in Chile, Columbia, online retail and interactive media, while shorting U.S. fixed interest and industrials. Top Buys are the iShares MSCI Chile ETF, Global X MSCI Colombia ETF and the SPDR S&P Internet ETF. Top Shorts are the iShares U.S Treasury Bond ETF and the Vanguard Industrials ETF.
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