Hong Kong, May 24, 2026, 23:02 (HKT)
- Futu Holdings finished Friday at $89.76, falling 27.5% for the session and about 33.3% off Friday last week’s close.
- The securities regulator in China has proposed a fine of about 1.85 billion yuan on Futu over its mainland China business.
- U.S. markets are closed over the weekend, and Nasdaq is shut again Monday, May 25, for Memorial Day. Futu releases Q1 numbers Thursday.
Futu Holdings is facing a tough start to the week. Its Nasdaq-listed shares dropped over 25% on Friday, hit by a regulatory case in China. The company is looking at a possible $271 million penalty and a bigger retreat from the mainland.
Futu’s first-quarter earnings are coming up on May 28, but investors won’t get a chance to react to the latest fallout until Tuesday. Nasdaq is shut for the weekend and on Monday for Memorial Day, so there’s no trading until the regular session starts again.
The fine is not the only problem now. Beijing’s crackdown on illegal cross-border brokerage — where offshore brokers handle trades for mainland clients in foreign securities — is raising questions about whether Futu could lose clients or see slower revenue growth. Investors are watching to see how much the political pressure will change their view of the company. Cross-border brokerage is a sensitive area for China since strict capital controls still apply.
China’s securities watchdog said Tiger Brokers, Futu, and Longbridge face penalties for taking clients in China without the right onshore licence. Reuters reported clients caught by the two-year wind-down will be able to sell off positions and take out cash, but they’ll be blocked from making fresh investments.
Futu disclosed in a U.S. filing that the China Securities Regulatory Commission and its Shenzhen unit said certain Futu entities ran securities, public fund sales, and futures business in mainland China without the needed license. Regulators want the entities to fix or stop these activities, give up illegal gains, and pay fines. The total proposed penalty is about 1.85 billion yuan.
The company said the penalty isn’t final yet. Futu can still give statements, defend itself, and ask for a hearing. At the end of the first quarter, accounts from mainland China with assets were about 13% of total funded accounts, Futu said. Business outside mainland China was normal.
Futu shares fell sharply on Friday despite gains in the wider market. Futu closed at $89.76, down $34.10 for the day. The Nasdaq Composite edged up 0.19%. Futu ended the week about one-third lower from $134.64 on May 15.
Peer pressure weighed on the group. UP Fintech, which owns Tiger Brokers, dropped hard, and Longbridge was also included in the regulatory action. UP Fintech said Beijing’s CSRC handed out administrative penalties and took illegal income from its subsidiaries, according to Reuters.
“The government wants to ensure that any outbound capital flows are under its scrutiny,” Gary Ng, senior economist for Asia Pacific at Natixis, told Reuters. Zhan Kai, a partner at Dacheng in Shanghai, said current penalties are “relatively lenient for now,” but added that larger fines or tougher steps might still come. Reuters
Analysts are dialing back on the stock. J.P. Morgan Securities downgraded Futu to “neutral” from “overweight” and slashed its price target to $87 from $300, Schaeffer’s Investment Research reported. Schaeffers Investment Research
Futu told investors over the weekend it has bought back roughly $160 million worth of American depositary shares, or its U.S.-traded shares, using a buyback plan from last year. The company said it could continue repurchasing shares depending on the market.
The risk isn’t one-sided. A smaller penalty than proposed, more aggressive buybacks, or faster overseas growth could help the stock. But a tougher final order, faster client losses, or more crackdowns on offshore trading might weigh on the shares.
Futu management reports earnings on Thursday, with the call set for 7:30 a.m. U.S. Eastern, or 7:30 p.m. in Hong Kong. Investors expect details on the coming charge, how quickly mainland accounts are falling, and whether overseas expansion can balance out business being wound down.
