Financial services company Magic Empire Global (NASDAQ: MEGL) held its initial public offering (IPO) last week and shares have soared more than 100% since its opening price.
It's up a significant amount from its original IPO price. Here’s what happened, and what could be next.
Magic Empire Global IPO: Magic Empire Global went public on Aug. 5 after selling 5 million shares at a price of $4. The company raised $20 million from its IPO before expenses. Network 1 Financial Services was the sole book runner and lead underwriter on the IPO.
Shares opened Friday at $50, up a significant amount from the $4 IPO price. Shares only fell slightly below their opening price once hitting $49.25, otherwise, it was clear sailing ahead. Shares hit a high of $235.95 on their debut and closed at $97.
Magic Empire shares are up once again Monday and now have a trading range of $49.25 to $249.94 since going public.
What the Company Does: Operating as a financial services provider in Hong Kong, Magic Empire Global mainly operates with four business lines, including IPO sponsorship services; financial advisory services; compliance advisory services; and underwriting services.
Since 2016, the company has completed eight IPOs where it was the sole sponsor. In 2020 and 2021, the company was involved with six IPO sponsorships, 31 financial advisory projects, 24 compliance advisory projects and three underwriting projects.
The company does business as Giraffe Capital, which offers this description on its website.
“Different from other sponsors, we care about the long-term development of our clients and strive to provide them with tailor-made and long-term corporate financial services,” the website reads.
In 2021, Magic Empire saw revenue of $631,770 from financial advisor services, $662,623 from compliance advisor services and $868,634 from IPO sponsor services. The company’s total revenue was $2.2 million in 2021. The company also reported net income of $202,398 in 2021.
See Also: If You Invested $1,000 In The AMTD Digital IPO, Here's How Much You'd Have Now
What’s Next: The company is focused on expanding its business after going public. The company sees the following as its main growth strategies:
Further strengthening our corporate finance advisory business in Hong Kong
Expanding our market presence in other international capital markets, particularly the Unite States
Developing our asset management business
Enhancing our brand
To determine what might happen to shares of Magic Empire Global in the coming weeks, investors could look at AMTD Digital Inc (NYSE: HKD). The digital solutions company from Asia also operates in the financial services market, comes from Asia and had a low float IPO.
The combination helped shares of AMTD Digital skyrocket after pricing 16 million American depositary shares (ADSs) at a price point of $7.80. Shares of AMTD Digital hit a high of $2,555.30 and had one of the biggest one-month increases in a share price in recent history.
Shares of AMTD Digital have traded between $12.05 and $2,555.30 since going public. Shares of the stock are now trading between $500 and $600 on Monday and have fallen in recent days.
As the story fades on Magic Empire and its hot IPO, investors could be looking for the next low float IPO and exit their investment in Magic Empire. There also could be more shares that hit the market in the future if the underwriter is granted additional shares and the company does any share offerings in the future given its increased value.
MEGL Price Action: Magic Empire shares are up 35% to $131.30 on Monday. Shares hit a daily high of $249.94 earlier in the trading session.
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