What happened
Shares of online stock-trading platform Futu Holdings (FUTU +0.11%) were up a little more than 11% as of midday Wednesday following Tuesday's post-close release of the company's second-quarter results. Revenue and earnings both more than doubled as the trading app surpassed 15 million users.
So what
Last year's wave of COVID-19 shutdowns didn't just convert a slew of U.S. consumers into active investors. Demand for diversions largely focused on meme stocks rose all over the world, setting the stage for Futu's meteoric rise, particularly in Singapore and Hong Kong.
Revenue of $203.1 million for the three-month stretch ending in June was a 129.3% increase from a year ago, the sixth straight quarter the company has posted triple-digit sales growth. Adjusted income of $70.9 million was 126.7% better than the bottom line from a year ago. Total trading volume grew by 104.3% with the brokerage's customer count swelling to 15.5 million.
Image source: Getty Images.
Now what
Last quarter's big growth should come as no surprise, as the numbers mirror the results Futu has been driving of late. And yet, it's arguable that the numbers did catch doubters somewhat off guard. The stock's closing price on Tuesday was 47% below June's peak and less than half of February's high, suggesting traders were anticipating a slowdown for this electrifying company. As it turns out, trading-as-entertainment is still catching on in a big way outside the United States.
To this end, Wednesday's surge isn't necessarily too big of an act to follow. The current price near $106 per share is still well below June's high near $180, leaving plenty of room for the stock to keep rising. Just bear in mind it's still a trade grounded far more in speculation than reasonable valuation, and should be handled as such.
