(Yicai Global) Aug. 4 -- AMTD Digital, whose market value has surged over 210 times since the Chinese fintech firm went public on the New York Stock Exchange three weeks ago, saw USD107 billion wiped off its market valuation yesterday for no apparent reason in a day of wild trading.

AMTD’s share price [NYSE:HKD] closed down 34.4 percent at USD1,100, with a market capitalization of USD107 billion. Earlier in the day it plunged as much as 41.9 percent to USD975, with volatile swings twice triggering the bourse’s circuit breaker.

The little-heard of Hong Kong-based firm has done extremely well since it went public on July 15. On Aug. 2, its 13th trading day, its shares surged nearly three-and-a-half times to USD2,520 apiece. Based on the closing price of USD1,679 that day, AMTD ranked among the top 10 most valuable US stocks, worth more than Meta, Coca-Cola and Goldman Sachs.

AMTD, which only employs 50 staff and logged revenue of just USD25 million last year, saw its market cap soar past USD100 billion on Aug. 1, making it the fifth most valuable Chinese stock in the US, ahead of e-retailer Pinduoduo and internet giants NetEase and Baidu.

The company had an astonishing price-to-earnings ratio of 137,000 times as of Aug. 2. By comparison, internet behemoth Alibaba Group Holding’s PE ratio was around 27 times as of yesterday, and that of Tencent Holdings’ just under 12 times. US financial giants J.P. Morgan Chase and Morgan Stanley have a PE ratio of about 10 times.

Nothing significant has occurred since the initial public offering, AMTD, which is a unit of AMTD Group and part of the late Hong Kong tycoon Li Ka-shing's business empire, said that day, adding that it is closely monitoring trading anomalies on the market.

“AMTD is clearly the newest meme stock, or shares that rapidly gain momentum through social media, with bands of retail traders purchasing the stock at the same time, pushing the price sharply higher,” said Victoria Scholar, head of investment at Interactive Investor. The bullish momentum was intensified by short covering to offset the loss of bearish positions, she added.

“The stock is highly overvalued,” said Thomas Nip, a research analyst at Valuable Capital. The small float, at less than 10 percent of total share capital, makes it easier for big stakeholders to push up the price. Also, the low turnover rate and the fact that the stock cannot be shorted are possibly behind the sharp price movements.

"As we've learned over the past two years, events like this cause what I would say is opportunities for profit but great risk for loss, particularly for our retail investors," Jay Clayton, former chairman of the US Securities and Exchange Commission, said yesterday on CNBC's "Squawk Box."

Editors: Shi Yi, Kim Taylor