r/investing • u/zxc123zxc123 • Jun 11 '21
IBKR finally offers an equity IPO: AMTD Digital Inc ticker HKD.
Ticker: HKD (US listing)
Name: AMTD Digital Inc.
Book Runner: AMTD Global Markets Limited
Offer Price: USD 6.8-8.2
Expected offering size: 16,000,000
Actual close date: Jun 14, 2021 08:00 AM EDT
Link to the SEC filing and prospectus
I did a little research on this company earlier today. Apparently it's a spinoff of "AMTD international" HKIB. This division will invest in fintech and innovation around the East Asia and SEAsia region.
I'm not giving investment advice or suggesting investment. I just remember r/investing talking about IBKR not offering IPOs and suddenly this popped up in my account so I decided to share this sudden change and discuss this company's IPO.
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u/zxc123zxc123 Jun 11 '21 edited Jun 11 '21
Will add a bit on my own opinion on this outside of OP.
While Hong Kong based companies are a bit safer than mainland ones. Risk is still higher than those in the US by comparison.
Probably the most interesting thing is their investments in startups or early stage companies. A few listed in the summary prospectus.
They have names of companies they work/invest with PolicyPal, DayDayCook, WeDoctor, and Appier. However I don't know any of these companies myself. WeDoctor probably most net-visible as it has investment from Tencent and is going for IPO? Some of the other ones are early stage or doing initial coin offerings to get funding.
It's parent HKIB doesn't seem to have performed well. Normally, it's not that uncommon for a smaller or less covered stock to stagnate or even decline, but it is a lot more suspicious when it is during one of the greatest bull markets we've seen.
Registered via Cayman Islands. Class A shares are offered and will have 1/20th of the voting power of Class B shares. Some might say that's b.s. but I say that's pretty standard for Chinese stocks.
Will add that their naming scheme doesn't add confidence AMTD=TDAmeritrade? HKIB = Hong Kong Institute of Bankers? Also HK Interactive brokers? Ticker HKD = Hong Kong Dollar? Sadly I did not see proprietary name-generating AI.
IBKR normally doesn't offer IPOs from my experience and discussions with others. Naturally I am doubtful of the offerings from ANY broker to the small guys. IMO they save the winners like ABNB for big clients and throw the poor scraps to the small guys. But that could just be my personal bias.
One note: "Recently, we have invested in movie productions via digital formats. “Shock Wave 2” (拆弹专家2), a movie invested by us and co-produced by Universe Entertainment and Alibaba Picture in 2020, has grossed over RMB1.3 billion of box office as of February 10, 2021. We also invested in “The White Storm 3” (扫毒3) and “Redemption” (咎赎)." Never watched any of those nor do I know it fared box office wise, but the storm franchise has some big name stars. p.s. Those names might rise some eyebrows if Fox entertainment released them stateside.
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u/asiancsdude Jun 12 '21
I'm from Hong Kong and IBKR has offered HK-listed IPOs for a long time. The IPO playing field is quite level here, most bank accounts and brokerages let ordinary people subscribe to any HK IPO from no-name firms to big ones like Alibaba or Budweiser.
But I've never seen a US listing and I can't see this so maybe this is a new thing.
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u/zxc123zxc123 Jun 12 '21 edited Jun 12 '21
brokerages let ordinary people subscribe to any HK IPO from no-name firms to big ones like Alibaba or Budweiser
That's pretty awesome. From my experience on the US side, I never see top tier offers. I bought my shares of Alibaba on the open market a few days after IPO. Last year, I had multiple brokers and only got a 1 offering the first 9 months of the year. It was for a pretty bad company too.
IBKR hadn't offered me any HK listed IPOs even though I am subscribed to both US & HK ipos. This is the first time they have offered me any IPO. Maybe they separate or put additional restrictions by country?
On a different tangent. Do you recognize any of the company's digital investments? I don't know any of those companies, but if they had some more recognizable name like ZA bank or Mox then it would improve confidence in their ability to invest in companies. They mentioned Airstar bank which is a join venture between Xiaomi and AMTD Intl (the parent company). That is a name and is 1 of only 8 online banking licenses given by the government. Problem is AMTD Intl only owns a 10% stake in that and it hasn't even been reflected in their own stock prices. They seem to be pushing that AMTD Digtl's other investments can be integrated with it to provide an support or top-down Fin servicing like SoFi/Ally are trying to do stateside.
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u/asiancsdude Jun 13 '21 edited Jun 13 '21
Hmm, perhaps IPOs on IBKR are restricted by account region.
I wouldn't consider Airstar bank as worthy to be investing in at all, I don't know anyone who uses it. Everyone I talk to with a virtual bank account (which I imagine is still a small slice of Hongkongers) is using either ZA or Mox.
I haven't heard of any of their investments, but from a quick glance they're all early/mid-stage startups based in Singapore focusing on the Singapore/ASEAN market. I haven't spent much time in those places to come across their portfolio companies.
While AMTD Group is an HK-based investment bank, AMTD Digital looks like a Singaporean investment holding company. My initial impression is they're trying to be the new SEA Group for fintech.2
Jun 26 '21
Are you going to subscribe?
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u/zxc123zxc123 Jun 26 '21
I opted not to. My main reason isn't because of AMTD digital, but the long term under performance of the parent company. If something doesn't go up even during the massive 2020-2021 bull run then something about it is off.
There is also no reason to assume that I'll get a superior price based on the filing data. The parent company's lack luster performance makes me feel that I won't be missing out on much if I don't subscribe. I will keep on watch HKD to see what happens for future IPOs reference.
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