Shares of Jimmy Lai’s Next Digital skyrocket after arrest, amid backing from supporters, speculation about sale of listed entity
- Shares of the company that owns Apple Daily skyrocketed by as much as 344 per cent in afternoon trade, rebounding from a record low in the morning
- Some analysts pointed to speculation that the company could sell its listed entity as a ‘shell’ for other firms to acquire in order to achieve a back-door listing
Shares of Next Digital, the parent company of Hong Kong newspaper Apple Daily, skyrocketed in frenzied trading on Monday, after police arrested its founder Jimmy Lai Chee-ying under the new national security law.
Next Digital, formerly known as Next Media, soared by as much as 344 per cent in the afternoon, before paring some of the gains to 183 per cent to close at HK$0.255.
It marks a dramatic turnaround for the stock in a roller-coaster day of trading. It had fallen 17 per cent in the morning session to a record low of HK$0.075, after news about the arrest first broke.
Turnover in the company’s shares shot up to HK$393 million, from a level of no more than HK$1.5 million recorded during the past two months.
He is the most high-profile person to be detained after the national security law imposed by Beijing on the city came into effect in late June.
Traders and analysts were left scratching their heads over the reasons behind the sudden surge in the stock price. Some pointed to speculation that the company could sell its listed entity as a “shell” for other firms to acquire in order to achieve a back-door listing, a common practice among small-cap companies listed in Hong Kong facing dimming prospects.