• Marble-mining company ArtGo was the world's best-performing stock of 2019, through Nov. 20, for firms with market values greater than $1 billion.
  • But its shares tanked 98% in a single morning on Thursday, 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.
  • The New York-based firm cited "further analysis and feedback from market participants on investability" for its decision.
  • ArtGo wasn't the only Hong Kong firm to wipe out swaths of investor wealth on Thursday. Small-cap company Kasen International Holding crashed 91% after short-seller Blue Orca Capital pushed the stock lower.
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Marble-mining company ArtGo was on track to be this world's best performing stock worth more than $1 billion. On Thursday morning, however, its shares tanked 98% and the company saw $5.7 billion in market value wiped out.

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-based firm announced in early November it was looking to add ArtGo to its MSCI China Index. Yet on Wednesday, MSCI noted the company would no longer be added after "further analysis and feedback from market participants on investability," WSJ reported.

Thursday's plunge came one day after WSJ published a column detailing ArtGo's 3,744% 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 from the year-ago period. Yet shares soared through the second half of the year.

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

"I believe the stock was being manipulated and wa closely held, but whether the SFC can prove that remains to be seen," he told WSJ in a Thursday email. He noted that the Hong Kong authority hasn't updated him on his warning.

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 small-cap firm Kasen International Holding crashed 91% Thursday before trading halted as 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, Bocom International Holdings managing director Hong Hao told WSJ.

"Local investors have seen this movie before. But international investors, less so," Hao said to the outlet.

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. The city's economy shrank 3.2% in the third quarter as antigovernment protests roiled its tourism, restaurant, and retail industries.