This Fund Made a $47 Million Bet on Futu Stock. Then Shares Crashed Nearly 25%

On May 14, 2026, Contrarian Capital Management disclosed a new position in Futu Holdings (NASDAQ:FUTU), acquiring 302,451 shares in the first quarter—an estimated $47.02 million trade based on quarterly average pricing.

What happened

According to a SEC filing dated May 14, 2026, Contrarian Capital Management disclosed a new position in Futu during the first quarter. The fund acquired 302,451 shares, with the estimated transaction value at $47.02 million based on the quarter's average share price. At quarter-end, the value of this position was $41.36 million, reflecting the combined effect of share purchase and price movement.

What else to know

• This was a new position in the fund, representing 11.6% of Contrarian Capital's 13F reportable AUM as of March 31, 2026.
• Top holdings after the filing:
  • NASDAQ:RJET: $71.55 million (20.1% of AUM)
  • NYSE:GGB: $68.84 million (19.3% of AUM)
  • NADSAQ:FUTU: $41.36 million (11.6% of AUM)
  • NYSE:TX: $39.85 million (11.2% of AUM)
  • NYSE:HSBC: $39.68 million (11.1% of AUM)
• As of Friday, Futu shares were priced at $104.07, up just 2% over the past year and well underperforming the S&P 500, which is up 28%.

Company overview

Company snapshot

• Futu Holdings offers digital securities brokerage, margin financing, and wealth management product distribution via Futubull and Moomoo platforms, serving both Hong Kong and international clients.
• The firm generates revenue primarily through commissions on securities and derivatives trading, margin lending, and distribution of financial products, complemented by market data and information services.
• It targets retail and institutional investors seeking online access to global capital markets, with a focus on tech-savvy and cross-border clientele.

Futu is a leading digital brokerage and wealth management platform operating in Hong Kong and internationally. The company leverages technology to deliver a seamless trading experience and diversified financial products to a growing base of retail and institutional investors. Its scalable, platform-driven model and integrated community features provide a competitive edge in the rapidly evolving digital financial services landscape.

What this transaction means for investors

Contrarian Capital built a lofty position in Futu during the first quarter, and shares have since fallen nearly 25% since. The tumble came after Chinese regulators earlier this month proposed penalties totaling roughly RMB1.85 billion related to certain licensing issues, an expense that pushed reported net income down 61% year over year to $106 million. Management emphasized that the charge "does not impact our business fundamentals or financial stability" and said it remains focused on international expansion.

Operationally, however, the business remains impressive. Futu grew funded accounts 34% year over year to 3.6 million, increased client assets 47%, and generated record trading volume of $530 billion in the first quarter. Revenue climbed 25% to $747.7 million, while gross profit rose 29%.

Nevertheless, this is now a question of regulation versus execution. Futu continues to add customers, assets, and trading activity at an impressive pace. And if the regulatory overhang fades, Contrarian's timing could look smart, but if scrutiny intensifies, the stock's recent decline may prove justified.

HSBC Holdings is an advertising partner of Motley Fool Money. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.