Li Zhixian Hong Kong Media Group’s share price soars by 330%

After the authorities froze the assets of imprisoned pro-democracy tycoons under the controversial national security law, the stock price of a Hong Kong media company controlled by Jimmy Lai surged 330% when it resumed trading.

Next Digital, which is listed in Hong Kong, owns the tabloid newspaper Apple Daily, which angered the Hong Kong government because of its role in reporting on the democratic demonstrations in 2019. Lai was jailed for participating in the protests and faced other charges, including conspiracy to conspire with foreign forces under the Hong Kong Security Law.

Next Digital’s stock subsequently reduced its gains to 96% in Thursday’s trading.

Dickie Wong, head of research at Kingston Securities, a Hong Kong brokerage firm, said the rise may be due to the purchase of the stock by supporters of Apple Daily and has nothing to do with the health of the business.

Obviously, from the buyer’s point of view, this momentum is very strong. . . Wong said, “Some people from the “yellow” side may support this company.” He was referring to the Hong Kong democracy movement, whose members are known for wearing yellow ribbons.

In Lai’s legal dilemma, Next Digital’s stock is very unstable. In August, the office of the billionaire and Apple Daily was searched for allegedly violating the national security law, and the stock almost tripled. Supporters gathered to show solidarity.

As a result, the police Fifteen people arrested in September Charged with conspiracy to defraud and money laundering, some of the detainees manipulated Next’s stock price.

“Apple Daily” is facing financial difficulties due to the pandemic and fears that the authorities will eventually force the newspaper to close. It also discontinued its Taiwanese version of the print edition.

At the beginning of this month, The Hong Kong government freezes Lai’s stock In the bank accounts of Next Digital and the three companies he owns. This prompted the group’s stock trading to cease.

This development marked the first time the National Security Law promulgated by Beijing last year was used to target most investors in a listed company.

Lai holds 71% of Next Digital’s shares, valued at approximately HK$350 million (US$45 million). He also provided a large number of loans to the company.

Next Digital said on Wednesday night that it is in discussions with auditors and has at least 16 months of working capital since June, so stock trading has resumed. The company added that it meets the 25% public float requirement under the stock exchange listing rules.

Senior pro-Beijing voices in Hong Kong are still putting pressure on the company.

The city’s former leader Liang Zhenying (CY CY) said in a Facebook post on Wednesday that Next Digital’s management was “negligence,” “irresponsible,” and “misleading”, stating that the group’s operations and financial conditions are not frozen by Lay’s Impact. assets.

Liang, who proposed that he is a minority shareholder of Next Digital, said that he also complained to the financial regulator about the group’s comments.