What happened
Shares of AMTD Idea Group (AMTD -2.29%) are still discovering gravity as the meme stock burns up on reentry from the stratosphere. Shares are tumbling 16.5% at 10:58 a.m. ET on Monday morning, continuing the plunge that began last week.
The Hong Kong–based company rocketed to fame on the success of one of its subsidiaries, another meme stock extraordinaire, AMTD Digital (HKD), which went public in mid-July and saw its shares soar 1,000% as chatter from the WallStreetBets crowd on Reddit drove the stock higher.
AMTD Idea's own stock went from around $2 a share to almost $13 a share at the same time, but at $3.91 a stub, it's on track to make the full round trip in record time.
So what
There was never any reason for either stock to make the kind of moves it did, valuing the respective companies as it did, putting them among the most expensive stocks on the New York Stock Exchange. Even now its $1.6 billion valuation puts it ahead of many other companies on the NYSE with a better track record and financial position such as 3D Systems, Fiverr, or Warby Parker.
AMTD Digital was an even worse case, as its half-trillion-dollar valuation -- yes, trillion -- was among the top 10 of all stocks, behind the likes of Apple and Microsoft.
Now what
Both stocks still trade well above their starting points. AMTD Digital is still up 4,300%, despite having shed over three-quarters of its value.
What this does show, though, is the growing power of the retail investor to move stocks beyond all sense. While early investors in these names are sitting on hefty profits, many more are nursing serious losses.