Summary AMTD's latest move to sell stock for crypto seems designed to spark speculative interest, not to add real business value. The only substantial asset remains the hotel properties; other ventures like magazines and film are unimpressive and lack visibility. I doubt the crypto-for-stock program will boost share prices in New York, unlike similar moves in London due to market differences. My view: unless you believe in a renewed speculative frenzy, AMTD's fun is likely over—I'm not interested in participating. I suppose it could work Long term readers will know that I've not been a huge fan of the varied AMTD companies over the years. There's always seemed to be more of the sizzle and less of the steak than we might want in an investment to me. No doubt that's terribly unkind of me but opinions are opinions and should be plainly stated. AMTD Digital The big excitement, back when, was when the AMTD Group (the private group at the back of all of this) had spun out AMTD IDEA ( AMTD ) which then in turn spun off AMTD Digital ( HKD ). That last company was, for a few days at least, valued at more than Goldman Sachs. Values of both/all have slipped considerably since those heady days . As many of us were insisting they would do once the excitement passed. My last look at the group went through the latest plan. Which was that AMTD Digital should perform another spin off . The major asset that's being traded here is those hotel properties. Which in my opinion moved from AMTD Group through IDEA to Digital and are now going to go on into WME/BSII. Along the way there's been considerable fun with meme stock games and so on. The major valuation, for me, is our opinion of how much meme stock fun we're going to have with this next iteration of floating those hotel properties. Opinions on that will obviously differ. But that's what, I think, is the proposition. That's now all live as The Generation Essentials Group . There are a few Paris based magazines, something of a film business and, as far as I can see again, those hotels. Of those the one that might have a substantial value is those hotels. Back when this all started I did go through the exercise of - roughly - valuing them and they seemed reasonable in price per room given the markets they were in. The other assets, well, I'm not sure. My opinion - and yes, purely opinion - is that they're nothing very much. Certainly, outside press releases from parts of the varied AMTD companies I've not come across them. I don't claim they don't exist, only that they're not famous enough to have crossed my timeline. That I don't know about them isn't proof of anything either. I am not a great fan, you might say, as earlier pieces show . One oddity Whether The Generation Essentials Group is now live as a trade is a bit confusing. Nasdaq seems to think it is . The company itself seems to think it isn't . If it is live then $3 and change wasn't a successful IPO. And if it isn't then $3 and change for a SPAC nominally worth $10 isn't good either. But that's not the part of the game that I find interesting here. Crypto So the latest announcement is that all three listed companies - AMTD, HKG and TGE - are now to sell stock for crypto . AMTD IDEA Group ("AMTD IDEA Group") (NYSE: AMTD; SGX: HKB), a NYSE and SGX-ST dual-listed company and a subsidiary of AMTD Group Inc., AMTD Digital Inc. ("AMTD Digital") (NYSE: HKD), a controlled and consolidated subsidiary of AMTD IDEA Group, and The Generation Essentials Group (NYSE: TGE), a controlled and consolidated subsidiary of AMTD Digital, jointly announced their plans to initiate a program for the respective listed company to exchange newly issued ordinary shares (including in the form of American depositary shares) of such listed company for certain cryptocurrencies (such as Bitcoin (BTC-USD), Ethereum (ETH-USD) , Tether (USDT-USD), BNB (BNB-USD), USD Coin (USDC-USD)) through transactions with interested cryptocurrency holders at mutually agreed pricing, based on prevailing market valuations and subject to applicable laws and regulations (each a "AMTD cryptocurrency conversion program"). And, erm, why? All of those coins are readily transferrable into USD which can then be used to buy stock in the normal manner. Any of the companies can have an at the market issuance program. There's no particular value to selling stock for crypto rather than $ given that crypto is readily tradeable into $ these days. Except, of course, that some companies have been buying crypto for their treasury operations and driving their stock price up as a result : London-listed companies are turning to Bitcoin to boost their share prices, drawing Europe’s largest equity market into a growing global trend in which businesses are transforming themselves into proxies for the cryptocurrency. At least nine companies, from a web design business to a gold miner, have in the past week announced that they have either bought Bitcoin to add to their corporate treasuries or plan to do so. They are following the likes of Japan’s Metaplanet and Germany’s Bitcoin Group in seeking to emulate billionaire Michael Saylor’s Strategy. The US software group’s valuation has soared almost 400 per cent to more than $100bn since August 2020 when it announced that would start raising billions of dollars to fund Bitcoin purchases. London has had very few Bitcoin companies basically because the authorities don't like crypto. So, no ETFs and so on that allow the regular investor into crypto via the main markets. Those companies that have bought crypto and announced that they have done so have done very well: They also include Smarter Web Company, a Guildford-based website design business listed on Aquis that rocketed in value from £4mn to more than £1bn in just two months after unveiling its Bitcoin buying plan in April. Its shares have since slipped but its performance has encouraged others.Panther Metals, a natural resources business that reported a £2.2mn loss last year, revealed this week that it had bought a single Bitcoin, executing on a plan announced earlier in June. Its shares are up 81 per cent this month. Bitcoin has risen more than 74 per cent in the past 12 months. Ah, so we've what markets do so well, a speculative frenzy. Sometimes these work out well and sometimes they don't. So, AMTD and crypto Now, this is very much opinion and nothing else but my read is that the varied AMTDs have seen this happening and thought that perhaps it would be a good idea to take part. And, to the extent that it would increase stock prices it would be a good idea. I don't think it will increase stock prices, to be fair. They're all New York listed and there are Bitcoin ETFs, covered options on ether via ETF (certainly, in Canada there are) and all sorts of alternatives which simply aren't available in London. So it's not like the AMTD groups would be offering anything new to the NY markets. It's also not true that holding, in Treasury, coins like Tether and USDC is going to be an interesting speculation. The entire point of both of those is that they're worth $1 and that they'll keep that value no matter what. It is possible - possible - that this move into selling stock for crypto will respark the boom in one or possibly all three of these related stocks (don't forget, the third is a subsidary, even with its own quote, of the second which is in turn a subsidiary of the first again with its own quote and the first is a subsidiary of the unquoted holding company even with a quote of its own). I tend to think it's unlikely as they're doing it in New York where these sorts of workarounds to get into crypto via the stock market are not necessary - unlike London. But, you know, hope springs eternal and all that. I also think that - and this is pure opinion, unsupported by anything so trivial as a fact - that this is why they're doing it. To see if they can spark that speculative interest again. Whether we want to get involved should - I think - depend purely on whether we think that interest is indeed going to get sparked again. Not for me. Why I'm wrong It could be that there's some special business within this related group that I'm not seeing. If this is so then my general undervaluation will be wrong. It's also possible that this crypto announcement will lead to something. I doubt it but we can all be surprised - HKD being briefly worth more than Goldman Sachs wasn't something many were expecting after all. It rapidly ceasing to be was predictable. My opinion I've made it pretty clear over the years my general opinion of the varied companies here. There is a real business, proper value, here, in the form of those hotel properties. They were, initially, reasonably (in that the valuations were not obviously wrong) valued. The market valuations of tens and hundreds of billions of $ were obviously speculative frenzy. As I said at the time and as subsequent events have shown. We are now on that third iteration of a new company being spun out to hold those hotel assets. There's some dressing about the magazine business but that really doesn't seem all that impressive. Now we've this idea of selling stock for crypto. I think - my opinion is - that this is simply observing what's sparking speculative frenzy elsewhere and thinking that perhaps it can do so here again. If we wish to bet on that frenzy then fine, why not? But I doubt that it's going to arrive and therefore would suggest that the fun and games here at AMTD are over. I could indeed be wrong but that's my read on matters.
