Dividends and Newly minted meme stock AMTD Digital plunges 40% after rally

In every market there is many types of investors and to have a functioning market there needs to be a variety of different players. Some investors are buy and hold (buy a profitable company and hold it for years – allow dividends to increase your total return), some are looking for value, some are momentum players (what stock is moving upwards and catch a ride), and the combinations are endless. What works for you is whatever you decide.

In an article by Bansari Mayur Kamdar and Medha Singh of Reuters, there has been a stock which has risen 21,000% since its IPO of $7.80. The stock is in the thousand dollar range, but be careful because it had dropped 40% in one day. The stock has since fallen to $201 a share and will likely go lower because the hype is gone.

AMTD Digital has been the stock of choice on Reddit.com, the social media platform central to the meme stock craze of 2021 or GameStock and AMC. AMTD Digital is a fintech firm based in Hong Kong and provides loans and services for fees. The company said it had no material change or event related to the company’s activities.

Linking to dividend paying stocks, owning a stock with a 21,000% return is winning the lottery if you sell, some or all of your shares and not reinvest. Consider someone who sold something, then bought and lost 40% of the value, it takes a great deal to achieve a 40% gain, if the stock does not have the abilities of a mega capital stock such as Google or Apple. (those companies went down by now they are back up) with a AMTD Digital ever go back up? The market is made up of many players all trying to make money or increase their wealth, if you are a dividend player you consider the long term and total return on your money. There are many movies where the character bets it all and loses only to walk away what they originally had.

There are more questions than answers, till the next time – to raising questions.


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