US-listed Chinese stock loses 90% in minutes after pump-and-dump warning

NEW YORK - Pheton Holdings, a Nasdaq-listed Chinese healthcare company, lost 90 per cent of its market value in a matter of minutes on July 29, hours after a Bear Cave research report said it may be the target of a pump-and-dump scheme.

Pheton shares had surged more than 600 per cent in 2025 before its collapse on July 29.

The stock closed trading on July 28 at US$30.96 and opened on July 29 at US$31.25. Then, around 12.26pm in New York, it suddenly sank 11 per cent and triggered a volatility halt. When trading resumed 90 minutes later, the stock’s plunge reached 89 per cent before trading was halted again. 

Pheton resumed trading and was halted at least eight more times, as it extended its decline to 95 per cent. The shares ended July 29 at US$1.65, with a market capitalisation of US$40.8 million, down from US$765 million a day earlier.

Bear Cave’s report, released just after 8am on July 29, urged US regulators to stop the trading of Pheton’s stock because it appeared that overseas groups were manipulating the price, putting it “at risk of a near-term, severe stock collapse”. The report alleged that “scammers” have used false rumours that Gilead Sciences will acquire Pheton or agree to partner with it as soon as Aug 6 to boost the shares. 

“These unsubstantiated rumours match a familiar pattern in which overseas stock scammers promote tightly held US-listed Chinese companies on the basis of spurious M&A (mergers and acquisitions) rumours, only for them to later experience sudden intraday stock collapses, often falling 90 per cent or more,” the Bear Cave report’s author Edwin Dorsey wrote.

Pheton is just the latest example of wild trading moves seen in Chinese companies that trade on Nasdaq. 

Ruanyun Edai Technology, which listed in April, shed 91 per cent on July 14. Park Ha Biological Technology, a skincare product developer, lost 93 per cent on July 8. Jayud Global Logistics shares saw a record 96 per cent plunge on April 2. China Liberal Education Holdings shares shed 98 per cent in one day in January, and then in June, the stock was suspended from trading by Nasdaq, which also denied a company request to continue its listing.

In June, shares of Regencell Bioscience Holdings extended a rally from a February low 82,000 per cent before tumbling 87 per cent in a nine-day streak of losses. The company, which has reported six consecutive years of net losses, blamed the surge on a short squeeze, a phenomenon where short sellers rapidly buy back borrowed shares to exit a trade, sending the stock even higher. BLOOMBERG