Magic Empire Global (NASDAQ:MEGL), the mysterious Hong Kong financial company that was pumped to over $250/share after its initial public offering ( ) last year. Then MEGL stock fell just as quickly and jumped again overnight.
Shares that closed on April 27 below $1 were trading for over $5 before U.S. markets opened today, April 28. The market capitalization was below $20 million before the New York market closed on April 27. At this writing, its market cap is over $100 million.
Hong Kong Pump and Dump
Stocks traded in Hong Kong are notoriously volatile.
There was a significant sell-off just two weeks ago after China tightened rules on the use of generative artificial intelligence ( ) systems like ChatGPT. Now stocks there are moving higher on optimism over the earnings of BYD (OTCMKTS:BYDDF), the electric car giant, and Chinese banks. Other Chinese markets are also rising.
TOP Financial Group (NASDAQ:TOP), an online brokerage formerly known as Zhong Yang, led the charge this time. There was no news on the company, but the stock rose 260% in New York on April 27. Overnight this was followed by the run in MEGL, as interest in TOP seemed to cool.
The volatility of thinly traded, often newly public, Hong Kong stocks over the last year has made the meme stock excitement of 2021 look puny by comparison. Those who get in as the rise starts and sell at the top are making a lot of money. Those who mistime their trades, and who don’t stay up all night looking at screens, can quickly find themselves broke.
MEGL Stock: What Happens Next?
The machinations of these small stocks should hurt the reputation of the Hong Kong market among serious investors. But traders and other gamblers must love it.
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On the date of publication, Dana Blankenhorn held no positions in any company mentioned in this story. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.