Magic Empire Global Share Swing: Co-Founders Became Billionaire Before Losing Out Most Money

Business

Two co-founders of Magic Empire Global, a Hong Kong-based investment bank, became billionaires for a short period and then their valuations fell below the billion-dollar mark as the company’s shares declined as much as 89 per cent on August 9. The company saw its shares soar as much as 6,149 per cent since debuting in the US on August 5.

Magic Empire Global provides underwriting and advisory services and has helped just one company go public in two years. The over 6,000 per cent jump in the company’s shares gave it a market value of $5 billion at one point, pushing up the co-founders’ valuations.

According to a Bloomberg report, the stakes of co-founders Gilbert Chan and Johnson Chen had jumped to $1.8 billion and $1.3 billion, respectively. The duo together controls about 63 per cent of the firm. Now, after the shares of Magic Empire dived 89 per cent on August 9, Chan’s stake stood at about $90 million and Johnson’s is valued at $65 million.

Magic Empire Global Limited, a financial services provider in Hong Kong that principally engages in the provision of corporate finance advisory services and underwriting services, on Wednesday also announced the closing of its initial public offering of 5 million ordinary shares at a price of $4.00 per share, according to a company statement.

It added that the aggregate gross proceeds from the IPO were $20 million, before deducting underwriting discounts and other related expenses. The ordinary shares began trading on The Nasdaq Capital Market on August 5, 2022, under the ticker symbol MEGL. The IPO was conducted on a firm commitment basis. Network 1 Financial Securities acted as sole book runner and lead underwriter for the IPO.

Magic Empire made its US market debut on August 5, offering 5 million shares priced at $4 per share. After several halts due to volatility, the stock ended its first session 2,325 per cent higher at $97 per share.

Currently, the company’s shares are trading at $12.30 apiece, down 0.16 per cent, on the Nasdaq.

According to the company’s website, Magic Empire Global Limited is a financial services provider in Hong Kong which principally engaged in the provision of corporate finance advisory services and underwriting services. Its service offerings mainly comprise (i) IPO sponsorship services; (ii) financial advisory and independent financial advisory services; (iii) compliance advisory services; and (iv) underwriting services.

MEGL is an active financial service provider in Hong Kong with a proven track record and a diversified client base. MEGL’s clients engage in a diverse spectrum of industry sectors including online advertising, property development, property management services, supply chain management, manufacturing, chemicals, logistics, education, and natural resources and travel.