AMTD Digita (NYSE: HKD) stock is up near 18% today (Tuesday), having been higher. There is no specific news to drive this, no announcement. Results were a couple of months back and they weren't terribly impressive. So we've no particular reason we can latch onto about why HKD is up that dollar thirty. Maybe it's just one of those things?
On the other hand we should be somewhat wary of AMTD in general. This applies to AMTD Digital, to the parent (near 90% owner) AMTD IDEA (NYSE: IDEA) and that company's parent, AMTD Group (not quoted). There was, obviously, the most lovely fun when HKD floated near a year back. The stock went absolutely wild, up to $1,800 and that sort of range, making the company worth more than Goldman Sachs at one point. Of course that all entirely faded and we're back down to below the IPO price now.
The thing is, it's really difficult to work out why we should put any interesting value on either IDEA or HKD.
AMTD Digital stock price from NASDAQ
In investigations elsewhere one of us had a look at the details of the business. And was not impressed, to say the least.
“My old worry about AMTD
The last time around I was worried about the movement of assets through the varied listed corporations:
Things get more complicated though. Before the Digital IPO there was some shuffling of assets between the three AMTD companies. Nothing unusual in that, get the right assets that you want to float into the company you're about to float. But a similar asset shuffle after the float is much more unusual. And yet that's what has been done. Hotel assets have been moved from AMTD Group into AMTD Digital via AMTD IDEA. Half a billion's worth in fact, although net of debt and so on it's around $250 million US.
Now, if you've a soaring share price then a very useful thing to do is offer some of your very highly valued shares for real assets. This is what Steve Case did when buying Time Warner with AOL stock. One of the deals of the century that was. Not so good for Time Warner shareholders but still.
What AMTD seems to have done is use the very highly valued shares of HKD - recall, the newly floated AMTD Digital – to buy assets from AMTD Group, that parent and unquoted company. Which is really very odd indeed. Because they even used valuations of stock along the line that were higher than market prices to do this.
The price didn't look wrong - objectively that is, the hotel rooms seem to have been about the value of hotel rooms in those locations - but I couldn't and cannot work out why they would shuffle those assets in the manner they did.
That still worries. But, those assets are in HKD so that's what matters to a valuation of HKD.
But even at the current market capitalisation of $1.89 billion some $250 million, net of debt, in hotel room equity isn't a grand support. So, we need to look at the rest of the business to see if that $1.89 billion makes sense.
Here's The Problem - What Is The Rest Of The Business?
Which is where my problem is now. I went looking for that business and I have to admit that I couldn't really find it. OK, that could be my research skills. One barrier could be language. Their work could all be in Cantonese (that's the HK part) or perhaps Mandarin on the Mainland.
What I could find was a certain amount of management burble (that might be unkind of me) about Web3 and the rest. But not, in fact, much else.
For example, here's one of their online videos. It's about metaversey things, Web3 - and NFTs.
Oh, right, that's a business we're all really excited about still, right? This is " 10th episode of the AMTD SpiderNet Infinity Power Vidcast series. " And it's got 672 views as of today. That's been up on the interwebs for 13 months now and it has that many views? The 9th in the series has some 2,700 views - after 14 months.
Now don't forget, these are videos from one of the grand meme stocks of recent times. A company that rivalled - for a week or two - GS in capitalisation.
Hey, sure, maybe it's me. Maybe I'm just not finding their proper output or something. But the base idea of the company seems to be movers and shakers in this world of metaversey and Web3 things. They're releasing videos to smaller global audiences than I used to play live music to 40 years ago (and boy oh boy was I a minor league musician).
AMTD Digital@AMTDDigital
413 subscribers
Well, no, I don't see it I'm afraid. Not $2 billion of value in a webby, multiverse, company that can't scare up more subscribers than the Crochet Channel. Actually, crochet - that single one - seems to have 100x the audience. And Pink Floyd has 3.4 million.
Looking at their own home page of what they say they do:
As the fusion reactor at the core of the AMTD SpiderNet ecosystem, AMTD Digital (NYSE:HKD) is a one-stop digital solutions platforms in Asia with businesses spanning multiple verticals, including digital financial services, digital media, content & marketing, SpiderNet ecosystem solutions, and digital investments.
Well, it's good corporate speak. As is the video of the CEO of the whole AMTD system. But, well, where's the beef here? There doesn't even seem to be any sizzle.“
Now, it could be that one of us is just not quite getting the AMTD Group. Or perhaps we were frightened by an AMTD as a child and have never got over it. But at this point our useful commentary on AMTD Digital is that the share price movements might well be fun but that's all they are, speculative moves in something that's a black box to any of us out here.