On August 10, the Hong Kong police launched a large-scale raid and arrested 10 people that included the founder of media group Next Digital, Jimmy Lai, his two sons, several executives of Next Digital, and Zhou Ting, a former member of an opposition group. They were suspected of violating Hong Kong’s National Security Law.
The police arrested Jimmy Lai for three reported reasons: 1) Retaliation for the U.S. sanctions against Chinese Communist Party members and 11 Hong Kong officials, including Chief Executive Carrie Lam; 2) Demonstrating the power and terror of the Hong Kong National Security Law for those who seek intervention from foreign powers; and 3) Suppressing freedoms, including freedom of speech and undermining Hong Kong’s autonomy in the One Country, Two Systems and the Sino-British Joint Declaration.
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As for Next Digital, it is a multimedia listed company, integrating magazines, newspapers, including Apple Daily, and the Internet. It has built a solid reputation for its support for pro-democracy groups in Hong Kong.
On August 10, the share price of Next Digital plummeted 16 percent to a record low of HK$0.075 in the morning session. After news of Jimmy’s arrest by Hong Kong police spread, shares of Next Digital skyrocketed as trading volume increased by nearly HK$400 million. The price soared by as much as 344 percent in the afternoon before leveling off to 183 percent to close at HK$0.255. The price surge continued on Tuesday closing at HK$1.1, an increase of 331 percent.
When Jimmy and the top executives of Next Digital were arrested, it initially dealt a blow to the media group. However, investors knew that these stocks would be blocked in the future, but instead of reducing their holdings, they did the reverse and increased their holdings.
The next event relates to the sales volume of Apple Daily. During the period of the anti-extradition protests in Hong Kong, the Hong Kong government banned businesses from placing advertisements with Apple Daily. This ban caused a severe blow to the sales of the newspaper. Nevertheless, Jimmy did not hesitate to run the newspaper at all costs in the face of financial stress.
When news of Jimmy Lai’s arrest by the Hong Kong police spread, residents showed up in force to show their support for the Apple Daily. They lined up till late at night to buy copies of the newspapers. By the morning of the next day, 350,000 copies were sold out before 8 o’clock.
The next event relates to the response and solidarity of the international community. News of Jimmy Lai’s arrest with high profile headlines that triggered a wave of condemnations worldwide. There was even a call that Jimmy Lai be considered for the Nobel Peace Prize.
The Chinese Communist Party originally wanted Hong Kong people to fear the power of the National Security Law; however, its actions have proved counterproductive. Within just 40 hours of Jimmy’s arrest, Hong Kong people and the world responded with defiance.
Translated by Chew and edited by Michael Segarty