US stocks: Webull shares plunge 18% after report flags structural ties to China

Webull's shares fell more than 18% on Wednesday after CNBC reported that a US congressional panel had found the online trading platform "tied in structural ways" to China's government.

The bipartisan House Select Committee on China, in a report set to be released on Wednesday, found "a profound gap" between the company's public marketing and actual control, the report said.

The committee said the company's corporate structure, including "software development, data pipelines, and core engineering operations", was dependent on infrastructure subject directly to Beijing's laws, according to the report.

Stock hit its lowest in nearly four months and was on course for the biggest one-day percentage decline since April last year, if current levels hold.

Webull, the House committee and a spokesperson for the Chinese embassy in the US did not immediately respond to Reuters requests for comment.

"The potential regulatory and operational implications of these findings create a level of uncertainty that we cannot reasonably incorporate into our estimates," Siebert Financial analyst Brian Vieten said, while suspending his buy rating and price target on the stock.

The House committee's findings underscore the growing scrutiny in Washington of Chinese links to companies operating in key areas of the US economy, including financial services.

Last week, Congressman ⁠Ro Khanna, a Democrat, warned that Beijing could steal AI model weights ‌developed by OpenAI, Anthropic and other top US firms, erasing the US edge over China.

US President Donald Trump's lavish three-day summit last month for Chinese President Xi Jinping also delivered no breakthroughs on thorny issues such as AI, trade, Taiwan and the war with Iran.
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