Billions Vanish Instantly—Wall Street Stunned

Person in front of falling stock market graph

Billions in retirement savings vanished in minutes as thinly traded, Chinese meme stocks—promoted by online influencers—crashed 90%, exposing regulatory failures and new threats to American investors.

Story Snapshot

Nasdaq-listed Chinese stocks like Pheton surged over 600% before collapsing 90% in minutes, wiping out billions.
Rampant social media promotion fueled speculative buying among US retail investors, many of whom suffered heavy losses.
Regulators issued warnings about pump-and-dump schemes but enforcement gaps allowed manipulation to flourish.
Major institutional investors are rapidly dumping all China stocks, citing risks and accelerating financial decoupling.

Wild Swings Expose Regulatory Gaps in US-Listed Chinese Stocks

On July 29, 2025, shares of several Chinese companies listed on Nasdaq—including Pheton—collapsed by 90% in minutes after warnings of a pump-and-dump scheme, following months of social media-driven hype that saw prices surge over 600%. This extreme volatility revealed deep vulnerabilities in how cross-border stocks are regulated and left many American investors reeling as billions evaporated from their portfolios. The incident has sparked urgent calls for tighter oversight and transparency, especially as Chinese firms often operate with limited disclosure and less accountability than their US counterparts.

Regulatory agencies such as the SEC and Nasdaq have struggled to keep pace with rapid, social media-fueled speculation in thinly traded foreign stocks. Promoters and influencers wield outsized influence, driving up prices and attracting retail investors who may not understand the risks. Despite warnings, enforcement remains difficult—especially with companies based overseas and opaque ownership structures. The resulting losses have disproportionately hurt everyday Americans, fueling frustration among those who expect government agencies to defend market integrity and protect conservative values like financial security and rule of law.

Institutional Investors Exit Chinese Stocks Amid Geopolitical and Regulatory Risks

Major US and global institutional investors, including Bridgewater and Temasek, have moved swiftly to dump all China stocks following the July collapse. These exits signal broader concerns about regulatory uncertainty, governance problems, and geopolitical tensions that make Chinese listings increasingly risky. The sell-off has accelerated the trend of financial decoupling between the US and China, with some experts predicting a wave of delistings and a chilling effect on future Chinese IPOs in America. Many retail investors, drawn in by social media hype, now face heavy losses and eroding trust in global markets.

Institutional exits also underscore the power dynamics at play: while large funds can quickly shift strategies and mitigate losses, individual investors are often left exposed. This disparity highlights the need for robust regulatory reforms that prioritize transparency, accountability, and investor protection. The episode has reignited debate over the wisdom of allowing foreign companies with limited oversight to access US capital markets, especially when American families and retirees bear the brunt of speculative crashes.

Social Media Manipulation Fuels Market Chaos and Investor Harm

Social media platforms have emerged as powerful engines of market manipulation, with influencers able to trigger massive moves in thinly traded stocks—often with little real scrutiny. In the case of Pheton and other Nasdaq-listed Chinese firms, aggressive online promotion drove speculative buying and artificially inflated prices, setting the stage for dramatic pump-and-dump collapses. This phenomenon poses a direct threat to conservative values around fair play, individual responsibility, and constitutional protections for Americans seeking financial security.

'I almost fell off my chair': Investors lose billions on meme stocks as 'pump and dump' scams multiply https://t.co/SMXa7XjwOk pic.twitter.com/QVqH4h7n4n

— Financial Post (@financialpost) August 18, 2025

Experts warn that unless regulators close enforcement gaps and increase cross-border cooperation, similar schemes will continue to proliferate—undermining trust in markets and exposing US families to unnecessary risk. Calls for reform include stricter listing standards, improved transparency requirements, and enhanced monitoring of social media-driven trading activity. The July crash serves as a stark reminder that unchecked speculation, opaque foreign ownership, and weak oversight can erode the foundations of America’s financial system and threaten the livelihoods of hard-working citizens.