AMTD’s story is not just about what it has done, but what it hasn’t

WITHIN 2 weeks of listing on the New York Stock Exchange (NYSE), AMTD Digital shares rocketed to a peak of US$1,679 on Aug 2 – by an astounding 21,425.6 per cent — since its initial public offer (IPO) on Jul 16. While the share price has since fallen to US$212, it still is 1,207.8 per cent higher than its IPO price of US$7.80.

The meteoric rise of AMTD Digital has had a much less significant impact on its parent company AMTD Idea (previously known as AMTD International).

Despite holding an 88.7 per cent stake in AMTD Digital, AMTD Idea’s share price gains were limited to a spike of 237 per cent on Aug 2, when it closed at US$7. The US-listed counter has since given up nearly all its gains and closed at US$2.36 on Aug 9 – down 25.5 per cent this year.

AMTD Idea also has a listing in Singapore, where it is thinly traded. The stock stood at S$12.97 on Wednesday (Aug 10), up 3.8 per cent or S$0.47 since the start of the year.

When approached for comment, a Singapore Exchange Regulation (SGX RegCo) spokesperson said: “SGX RegCo has observed limited trading of AMTD Idea shares on SGX. Nevertheless, we are in communication with AMTD Idea’s primary regulator, the NYSE. Investors should continue to monitor the company’s announcements.”

The dramatic rise of AMTD Digital's shares has drawn a lot of attention to the AMTD group, and what it has done.

AMTD Idea calls itself a financial institution, and some of its work has included underwriting IPOs. The AMTD Digital IPO, for one, was underwritten by AMTD Global Markets, a unit of AMTD Idea.

Another IPO that AMTD Idea underwrote was that of US-listed Ebang, a cryptocurrency miner.

A short-seller research outfit, Hindenburg Research, in April put out a report alleging that Ebang had funnelled more than its IPO proceeds back to AMTD Idea.

Hindenburg also highlighted AMTD Idea’s less-than-stellar track record as an underwriter of new listings in the United States stock market: 13 of 15 of IPOs have resulted in substantial losses for investors, Hindenburg noted, with losses ranging from 10.3 per cent to 86.3 per cent.

The track record of AMTD Idea's chairman and controlling shareholder Calvin Choi, meanwhile, has been marred by various allegations of misconduct.

CMIG, a Chinese private equity firm where he was previously a partner, hung banners across Hong Kong, accusing him of defaulting on debt. And the Hong Kong Securities and Futures Commission wants to ban him from certain regulated activities for 2 years for violations during his stint at UBS' investment bank in Hong Kong.

Choi is appealing the ban and disputes the CMIG allegations. But the spotlight on AMTD Digital has cast an uncomfortable glare on him as well.

Amid this media attention, the AMTD group's activities in Singapore have become almost a footnote.

But they are worth a closer look. AMTD Idea has worked hard to ingratiate itself with Singapore's authorities for some years. It has been a regular sponsor of the Singapore Fintech Festival for some years, and the decision to do a dual listing in Singapore would undoubtedly have been welcomed.

The company also took a shot at a Singapore digital bank licence, but lost to 4 other applicants.

There has been a string of deals with local startups, some of them through a solidarity fund launched during the pandemic. Among the local startups on the receiving end of the group's attention: insurtech company PolicyPal, payments gateway provider FOMO Pay, and private markets operator CapBridge.

Through 2020 and 2021, the AMTD group issued a steady string of releases touting its new initiatives and investments. The corporate website for AMTD group lists 83 press statements issued in 2021 last year alone.

This year, however, there have been only 2: One was a New Year's message from Choi and the other gave news of an appointment.

One of the announcements made in June 2020 was about AMTD Digital's plan to acquire a controlling stake in CapBridge via an "unparalleled fusion-in programme", which appeared to refer to an investment that was part-cash, part-share-swap.

The acquisition was subject to approval from the Monetary Authority of Singapore, but 2 years have gone by with no updates. On Capbridge's corporate website, the page that used to display this announcement now carries a 404 message saying the page is not available.

A slower pace of announcements and delays in deals do not necessarily presage anything. Global capital markets have been volatile this year, and dealmaking activity has fallen. Delays happen for multiple reasons, and there is no telling what has held up this one.

Nevertheless, investors looking into the AMTD group's operations would do well to pay attention to more than what is being said and done. Sometimes, what goes unsaid can be just as instructive. To quote SGX RegCo, investors should continue to monitor the company's announcements.