Webull stock price is in a deep dive today as market participants react to a new congressional investigation in the United States. BULL plunged by over 30% to $5.55, down sharply from the September high of $10.18.
Webull stock drops on national security concerns
BULL stock has plunged after a bipartisan congressional report showed that it is a national security threat because of its ties to China’s government.
The report, written by the House Select Committee on China, showed that there were profound gaps between its marketing as an American company and the company’s actual controls. It said:
“Webull’s ownership architecture, technical workforce, technology infrastructure, cross-border data routing, corporate financing, and compliance frameworks are tied in structural ways to the People’s Republic of China.”
Webull rejected these claims, with a spokesman writing that:
“Webull’s U.S. business is conducted from its global headquarters in St. Petersburg, Florida and its office in New York City, while U.S. customer data is stored in the U.S. and access to sensitive customer data is controlled by the U.S.”
It is unclear what will happen to Webull, a company that competes with top names like Robinhood Markets, Charles Schwab, and E-Trade, which is now owned by Morgan Stanley. It offers a product that makes it possible for users to trade stocks, cryptocurrencies, and options.
Webull’s business is growing
The report comes at a time when Webull’s business is continuing its growth trajectory. Its second-quarter revenue jumped by 51% to $198.8 million, leading to an operating profit of over $62.6 million.
This revenue was driven by the rising number of traders and investors who are using its platform. Its registered users soared to over 28 million. For example, US regulators decided to remove the Pattern Day Trader (PDT) rule that incentivized more people to join its platform. It also expanded its business to other markets, including Spain, Argentina, and Colombia.
This growth is expected to continue in the foreseeable future. The annual revenue is expected to jump by 41% to $783 million, followed by $898 million in the coming year. It is unclear whether the congressional investigation will affect its revenue growth.
Webull share price technical analysis
BULL stock chart | Source: TradingView
The daily chart shows that the BULL stock price has been in a downward trend in the past few weeks, moving from a high of $10.18 on September 4. This sell-off accelerated after the congressional report.
It has now slumped below all moving averages and the Major S/R pivot point of the Murrey Math Lines tool. The Relative Strength Index (RSI) has also continued moving downwards.
Therefore, the path of the least resistance for the stock is downward, with the next target being at $5. A move below $5 will point to more downside, potentially to the Strong, Pivot, Reverse level of the Murrey Math Lines tool.
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