Magic Empire Global stock soared as much as 5,799% in its IPO debut on Friday.
The move in the Hong Kong-based stock comes just days after shares of AMTD Digital saw a wild rally of more than 32,000% from its IPO debut.
One thing in common both companies have is the low-float nature of their shares outstanding.
Shares of Magic Empire Global soared as much as 5,799% in its IPO debut on Friday as another obscure Hong Kong-based company saw wild trading activity.
Magic Empire Global, a finance company that offers advisory and underwriting services, priced its IPO at $4 per share on Thursday. The stock hit a high of $235.95 on Friday. Magic Empire sold 5 million shares to raise $20 million in gross proceeds from the offering. No apparent news was behind the move higher, similar to the more than 32,000% gain AMTD Digital stock saw earlier this week.
Since AMTD Digital's stock peak on Tuesday, the stock has fallen as much as 79% as selling pressure starts to outweigh buying pressure.
Another thing in common between Magic Empire Global and AMTD Digital is that both companies have a low-float of shares outstanding available to trade by investors. That means it doesn't take much buying pressure to push the stock higher.
Retail traders may be helping drive the gains in Magic Empire, with data from Fidelity showing it the sixth most actively traded stock on its platform on Friday. Fidelity buy orders from its customers totaled 5,044, while there were only 474 sell orders, showcasing the lopsided nature of a stock price when its shares are experiencing such a wide imbalance in supply and demand.
Magic Empire's market valuation topped $4.7 billion at its intraday peak on Friday, despite the fact that the company only generated $2.1 million in revenue in 2021, according to its S-1 filed with the SEC.
Since AMTD Digital's stock peak on Tuesday, the stock has fallen as much as 79% from its peak as selling pressure starts to outweigh buying pressure. Whether Magic Empire follows the same pattern as AMTD Digital remains to be seen.
Read the original article on Business Insider