Hong Kong banker Calvin Choi appears to have amassed an immense fortune at record speed. Less than a month after the 43-year-old listed hisAMTD Digitalon the New York Stock Exchange, his stake in the digital financial services firm has skyrocketed 14,000% for reasons his firmcan’t explain. Now his holdings appear to be worth as much as $36.8 billion—based on AMTD Digital’s stock price at Wednesday’s close. But his stake inAMTD IDEA, which is AMTD Digital’s parent company and through which he holds the shares, is worth just under $500 million, illustrating just how out of whack the stock’s insane valuation is at the moment. (Because of the way the holdings are structured, Forbes would not currently include Choi in our billionaires’ ranks.)
A spokesperson for holding company AMTD Group was able to confirm Choi’s shareholdings, but declined to comment on the market values of those holdings. AMTD Digital is a thinly traded stock, and yet the company’s market cap now stands at a whopping $203 billion. That gives the company a price-to-sales ratio of 8,077, whereas Robinhood Markets has a P/S ratio of only 2.73.
Comparisons are being drawn to meme stocks that gain a cult-like following of investors who collectively influence the price of shares, but it’s unclear if that’s the case here: “It’s a combination of a few things—a small float, some likely short interest and now the meme stock angle,”explainsBrendan Ahern, chief investment officer at China-focused ETF provider KraneShares.
Remarkably, for a company that’s now bigger than the likes of Walt Disney and Morgan Stanley by market cap, AMTD Digital said it has just 50 employees across offices in Hong Kong and Singapore as of February. And its financial performance fails to support its huge market cap. For the 2021 fiscal year ended in April, AMTD Digital reported a 16.9% increase in revenue from a year earlier to HK$195.8 million (about $25.2 million) and an 8.9% rise in profit to HK$172.5 million, partially a result of gains it booked from equity investments in private companies.
Choi, a former UBS managing director, effectively controls AMTD Digital through a web of companies. His wholly-owned company, Infinity Power Investments, holds a 20.4% stake in AMTD Digital’s parent company, AMTD IDEA (also goes by the name AMTD International), but has majority voting power (51.3%) through Class B stock. AMTD IDEA itself owns 88.7%, including all the Class B shares, of AMTD Digital.
Shares of AMTD IDEA, which is dual-listed on the New York Stock Exchange and the Singapore Exchange, also soared. Its stock price more than tripled since Monday and boasts a market cap of $2 billion as of Wednesday’s close. According toForbes’estimates, Choi’s stake in AMTD IDEA would be worth about $480 million on paper. Another method of calculating his paper net worth is using his indirect stake in AMTD Digital that’s worth $36.8 billion—making him the sixth-richest person in Asia onForbes’Real-Time Billionaires Rankings, surpassing Hong Kong’s richest manLi Ka-shingand Tencent’sMa Huateng—if prices hold steady. AMTD Digital shares plummeted 34.5% on Wednesday.
When asked to comment on Choi’s net worth calculation, a spokesperson for AMTD Group, which effectively controls AMTD IDEA through a 32.5% equity stake, said, “We see no problem of such calculations but want to kindly remind you that AMTD Group, operating our IDEA strategy, owns more businesses other than AMTD IDEA and AMTD Digital.” Choi declined to comment further through the same spokesperson.