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HK's Next Digital shares soar as trading resumes after Jimmy Lai assets frozen

Berita 24 English -  Shares in imprisoned tycoon Jimmy Lai's Next Digital Ltd soared on Thursday, the first day of trading, after a more...

Berita 24 English - 
Shares in imprisoned tycoon Jimmy Lai's Next Digital Ltd soared on Thursday, the first day of trading, after a more than week-long suspension due to a national security law-imposed asset freeze on the pro-democracy activist.

In a late Wednesday statement, the media publisher said that it had sufficient working capital to last at least 18 months from April 1 without additional funding from Lai, its controlling shareholder.

The shares opened 141.9 per cent higher at HK$0.45, the highest level since December 2020, when Lai was charged under China's new security law. They then extended gains to HK$0.80, the highest level since August 2020, when Lai was arrested, and his Apple Daily newspaper's newsroom was raided by national security police.

The stock can be extremely volatile due to retail investors' dominance, and its spikes are frequently a result of buyers expressing support for Lai and his pro-democracy publications.

"There is an absurd number of investors willing to speculate on this stock," Wealthy Securities
managing director Louis Tse said. "I believe the moves are unrelated to the stock's financial fundamentals."

The National Security Department of Hong Kong had notified Next Digital's chief executive, Cheung Kim Hung, that Lai was prohibited from dealing in assets, including shares in the listed company and bank accounts of three firms owned by Lai directly or indirectly said late Wednesday.

"The board does not anticipate that the notice will have an immediate adverse effect on the group's financial condition or operations," Cheung said in the statement.

On May 17, Next Digital's stock was suspended.

Apple Daily, Next Digital's pro-democracy tabloid, stated at the time that the group had sufficient working capital for nine to ten months.

Next Digital reported that its unaudited bank and cash balances as of March 31 totalled HK$521.4 million ($67.17 million). It added that it anticipated long-term cost savings due to a recent decision to discontinue print publication of Taiwan Apple Daily.

Next Digital, in which Lai owns a 71.26 per cent stake, also stated that it did not anticipate the national security notice affecting its share trading volume.

Lai, a stalwart Beijing critic, regarded as a traitor in China, was sentenced to 14 months in prison in 2019 for participating in unauthorised assemblies during anti-government protests in Hong Kong. His arrest was one of the most high-profile under the security law. He is also charged with three additional counts, including collusion with a foreign country.

Lai is scheduled to appear in court on Friday to hear a sentence for another unauthorized assembly on October 1, 2019 – China's national day. He had entered a plea of guilty.

(1 dollar equals 7.7629 Hong Kong dollars)

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