Hong Kong riot supporter Jimmy Lai (center) leaves the Kowloon City police station in Hong Kong on Friday after being arrested for taking part in an unauthorized assembly on August 31, 2019. Photo: AFP

Stock prices of Hong Kong media company Next Digital, run by Jimmy Lai Chee-ying which publishes tabloid newspaper Apple Daily, surged more than 330 percent at 2 pm Monday to HK$0.40 ($0.052), after Lai was arrested for violating the national security law of Hong Kong for collusion with foreign powers to harm Hong Kong.

There was almost no trading for Hong Kong-listed Next Digital in the morning session, but the company's share price was driven up in the afternoon session, with transaction soaring to over 410 million shares. Its market capitalization surpassed HK$950 million ($122 million) intraday.

Next Digital's shares closed up 183.33 percent at HK$0.26 on Monday.

"There may be some investors buying Next Digital to send the message that although Lai has been arrested by local police, the company will remain intact in business," Liang Haiming, chairman of the China Silk Road iValley Research Institute told the Global Times Monday.

Public information showed that Lai has a stake of 71.26 percent in Next Digital, with only 757 million shares in circulation.

Given the small number of circulating shares, it would only cost several million Hong Kong dollars to drive up the share price, according to Liang.

A Hong Kong Facebook user using the name "Pazu shubobo" posted Monday that he bought 1 million shares of Next Digital, expressing confidence in the company's prospects. However, the user warned other stock investors of the high risk of investing in the stock and told them not to follow his move made based on his own calculations.

Lai's poor management of Next Digital led it to post huge losses over the past decade. Media reports said that the company saw a total loss of more than HK$2.7 billion in the past 10 years, and an unsustainable subscription business model and shrinking advertising revenue may drive Next Digital's share price lower.

According to financial results released by Next Digital, the company posted a loss of HK$415 million in 2019. Facing operating losses amid the COVID-19 outbreak, Apple Daily's Taiwan branch announced in June it would lay off about 140 employees, or about 13 percent of the total in its Taiwan office, to survive the difficult period.

Lai and his cohorts at Next Digital are accused of acting against China and trying to separate Hong Kong from its motherland in the name of pursuing "news freedom".

The Hong Kong police searched the headquarters of Next Digital Monday morning, as a group of top executives from the media group were detained by police.