ArtGo: From best performing stock in the world to a 98 percent decrease
ArtGo's shares went from the best to plummeting completely after MSCI denies addition to China Index.
On Thursday morning, 21 November, Hong Kong-listed marble mining company ArtGo’s, which was quickly nearing the world’s best-performing stock worth more than $1 billion, shares fell 98 percent and the company saw $5.7 billion in market value erased.
This comes after MSCI announced on Wednesday, 20 November, that it would no longer be adding ArtGo to its MSCI China Index after “further analysis and feedback from market participants on investability”.
ArtGo’s shares skyrocketed through the second half of the year, despite it being 85 times the company’s revenue which, for the first half of the year, was half of the previous period’s. Marble prices have also not increased in 2019.
Because of this, activist David Webb issued a “bubble warning” and wrote to Hong Kong’s Securities and Futures Commission, asking the agency to investigate the run-up.
He told the Wall Street Journal in an email that he believes the stock was being manipulated and was closely held. “But whether the SFC can prove that remains to be seen,” he said.
While this drastic plummet was highly irregular, it isn’t unheard of for Hong Kong’s strained stock market. Small-cap firm Kasen International Holdings’ shares also crashed 91 percent on Thursday before trading closed.