Microcap Stock Crash Wipes Out $3.7 Billion in July as Pump-and-Dump Scams Target Retail Investors

Seven US-listed Chinese microcap stocks plummeted over 80% in July, erasing $3.7 billion in market value. Concorde International, Ostin Technology, and five others saw explosive price surges before collapsing amid coordinated social media promotion and dumping. The Financial Times reports these companies were heavily promoted in WhatsApp groups mimicking legitimate investment forums.

While no direct company involvement was proven, analysts identified classic pump-and-dump patterns. The FBI notes a tripling of complaints about such schemes, with scammers increasingly impersonating brokers and analysts to build trust before pushing volatile Chinese stocks. This trend coincides with a flood of microcap Chinese IPOs on US exchanges since 2022.

London-based coach TIA Castagno was among those affected. The incidents highlight growing risks in lightly regulated microcap markets, particularly for retail investors targeted through social media channels.