Reuters / Cheryl Ravelo-Gagalac

The marble-mining company ArtGo was the world's best-performing stock of 2019, through Wednesday, for firms with market values greater than $1 billion.

But its shares tanked 98% on Thursday morning, wiping out more than $5.7 billion in market value before trading was suspended.

The losses came after MSCI dropped its plans to include ArtGo in its influential China index, a development first reported by The Wall Street Journal.

The New York firm cited "further analysis and feedback from market participants on investability," The Journal said.

ArtGo wasn't the only Hong Kong firm to wipe out swaths of investor wealth on Thursday. Kasen International Holdings, a small-cap company, crashed 91% after the short-seller Blue Orca Capital pushed the stock lower.

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The marble-mining company ArtGo was on track to be the world's best-performing stock for firms worth than $1 billion. On Thursday morning, however, its shares tanked 98%, and the company saw $5.7 billion in market value wiped out before trading was suspended.

The Hong Kong-listed stock plummeted after MSCI dropped its plans to include ArtGo in its influential indexes, a development first reported by The Wall Street Journal.

The New York firm announced in early November that it was looking to add ArtGo to its China index. On Wednesday, MSCI said the company would no longer be added after "further analysis and feedback from market participants on investability," The Journal reported.

Thursday's plunge came one day after The Journal detailed ArtGo's 3,800% gain through the year.

ArtGo's shares had formed what some experts viewed as a disconnect from the company's fundamental performance. The share price hit 85 times the company's revenue, higher than some of the world's buzziest tech companies. Marble prices haven't jumped in 2019, and ArtGo's revenue for the first half of the year was half that of the year-ago period. Yet shares soared through the second half of the year.

The discrepancy led the activist investor David Webb to issue a "bubble warning" in September about ArtGo's shares, The Journal reported. Webb also asked Hong Kong's Securities and Futures Commission to investigate the run-up.

"I believe the stock was being manipulated and was closely held, but whether the SFC can prove that remains to be seen," he told The Journal in a Thursday email, adding that the Hong Kong agency hadn't updated him.

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Though the 98% tumble is highly irregular for most popular publicly traded companies, the move isn't unheard of for Hong Kong's volatile stock market. Shares of Kasen International Holdings, a small-cap firm, crashed 91% on Thursday, before trading halted, as the short-seller Blue Orca Capital pushed the stock lower.

The city's wild stock swings are par for the course, and domestic investors are fairly used to them, Hong Hao, a managing director at Bocom International Holdings, told The Journal.

"Local investors have seen this movie before," he said. "But international investors, less so."

The macroeconomic picture isn't set to improve in Hong Kong anytime soon. The city entered its first recession in a decade after October data showed a second consecutive quarter of GDP contraction. Its economy shrank by 3.2% in the third quarter as antigovernment protests roiled its tourism, restaurant, and retail industries.

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