Webull's stock (BULL) is experiencing a sharp sell-off today, with shares tumbling over 30% to $5.55, a significant drop from the September high of $10.18. The decline follows the release of a bipartisan congressional report that raises national security concerns about the brokerage's ties to China.
Congressional Report Sparks Sell-Off
The report, issued by the House Select Committee on China, alleges that Webull's ownership, technical workforce, and data infrastructure are structurally linked to the People's Republic of China. It claims there are profound gaps between Webull's marketing as an American company and its actual controls. The report states that Webull's compliance frameworks and cross-border data routing are tied to China in ways that pose a security threat.
Webull has rejected these allegations, emphasizing that its U.S. operations are run from Florida and New York, with customer data stored domestically and access controlled by U.S. personnel. The company maintains that it operates independently and securely.
Business Growth Continues
Despite the controversy, Webull's business has been expanding rapidly. In the second quarter, revenue surged 51% year-over-year to $198.8 million, yielding an operating profit of over $62.6 million. The platform has attracted more than 28 million registered users, aided by regulatory changes such as the removal of the Pattern Day Trader rule, which encouraged more active trading. Webull has also broadened its international footprint, entering markets like Spain, Argentina, and Colombia.
Analysts project continued growth, with annual revenue expected to rise 41% to $783 million, followed by $898 million next year. However, the impact of the congressional investigation on this trajectory remains uncertain.
Technical Outlook Points Lower
From a technical perspective, the stock has been in a downtrend since early September, and today's plunge has pushed it below all major moving averages and key support levels. The Relative Strength Index (RSI) is also trending downward, indicating bearish momentum. The next support level is seen at $5, and a break below that could trigger further declines toward the Strong, Pivot, Reverse level of the Murrey Math Lines tool.
Investors are now weighing the potential regulatory and political fallout against the company's operational performance. The situation remains fluid, and the market will be watching for any further developments from Washington or the company itself.
This article is for informational purposes only and does not constitute financial advice.
