Yet another Chinese company has baffled Wall Street after the uplisting of Addentax Group (NASDAQ: ATXG) resulted in single-day gains exceeding 13,000%, before its stock price came crashing back down to Earth.
During its debut session, ATXG common stock opened at US$27 before sliding to approximately US$12.95. Disappointing, although not entirely unexpected from a Shenzen-based garment manufacturing and logistics operation with under US$13 million worth of revenue for the year ending in March.
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Then, in just a matter of hours, ATXG inexplicably rallied all the way up to US$411.63 before trading was halted. The stock price would eventually close at a staggering US$656.54 with a market capitalisation of around US$20 billion (and trigger over 20 volatility halts).
At the time of this writing, the world has returned to its senses. ATXG is currently priced at US$30 per share with a total market cap nearing US$783 million.
A reasonable explanation has yet to be determined.
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As previously mentioned, while Addentax Group can certainly be categorised as an anomaly, it represents the third explosive Chinese IPO in recent history to leave us scratching our heads after the listing of financial services companies AMTD Digital (NYSE: HKD) and Magic Empire Global (NASDAQ: MEGL).
HKD mysteriously climbed its way to US$1,679 per share before deflating to US$212 a week after, now trading at US$114. MEGL, on the other hand, mysteriously climbed to a slightly more reasonable US$117 per share before it was revised to US$12.32, now trading at US$6.53. According to Investor Palace, neither one is profitable.
Incidentally, the Addentax Group, AMTD Digital, and Magic Empire Global order books were all led by Network 1 Financial Securities in Red Bank, New Jersey.
