By Niket Nishant
Oct 7 (Reuters) – Webull shares dropped to a near-four month low on Wednesday after CNBC reported that a US congressional panel had found the online trading platform “tied in structural ways” to China’s government, prompting a strong rebuke from the company.
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 reported findings underscore the growing scrutiny in Washington of Chinese links to companies operating in key areas of the US economy, including financial services. Webull’s shares were last trading 19.5% lower at $5.86.
“Webull has made every effort to cooperate with the Committee, but did not hear from them for more than 20 months before this report was released,” a spokesperson for the company said.
“It is deeply disappointing that the Select Committee published a report containing significant inaccuracies and unsupported conclusions without ever seeking clarification from Webull,” the spokesperson added, noting that the company stores US customer data in the US.
While the US and China have been under a tariff truce for about a year, tensions still remain. 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.
Chinese President Xi Jinping has also described the relationship between the two superpowers through the lens of the “Thucydides Trap,” a theory that competition between a rising power and an established one tends to lead to war.
US President Donald Trump’s lavish three-day summit last month for President Xi delivered no breakthroughs on thorny issues such as AI, trade, Taiwan and the war with Iran.
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 Webull’s stock.
(Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Shinjini Ganguli)
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